Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R):
Assertion (A): A low Debt Equity ratio indicates a favourable position.
Reason (R) : A low Debt Equity ratio indicates high safety cover and it shows that enterprise is depending more on shareholders funds than external equities.
In the context of the above two statements, which of the following is correct?
1
(A) and (R) both are correct and (R) correctly explains (A).
2
Both (A) and (R) are correct but (R) does bot explain (A).
3
Both (A) and (R) are incorrect.
4
(A) is correct but (R) is incorrect.
5
None of the above