Debt-Equity Ratio of a company is 2:1. Which of the following transactions will result in an increase in this ratio?

Purchase of a fixed asset on a long-term deferred payment basis increases long-term debt while equity remains unchanged, thereby increasing the Debt-Equity Ratio. Issue of bonus shares and conversion of debentures reduce debt or increase equity, decreasing the ratio. Redemption of preference shares reduces equity (if paid from capital) or cash, altering the ratio differently, but long-term debt acquisition directly increases debt.