mercury training jun 2008

This topic has 5 replies, 5 voices, and was last updated 10 years ago by John Moffat.

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November 12, 2012 at 7:51 am #55206
mula
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i am lost on how the ve of 88 and vd value were calculated. please help
November 12, 2012 at 3:58 pm #107066
dazhong0703
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Gearing of Jupiter is 12%, so equity is 88%, and debt is 12%.
November 12, 2012 at 4:07 pm #107067
muhaimin
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Simple is this! May be the next line clear it more.

“In this question Gearing refers to (total debt to total market value) and as we all know that total market value = Total debt + Equity”
November 12, 2012 at 8:39 pm #107068
John Moffat
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Muhaimin is correct – gearing can be defined in more than one way, but the examiner has said in the question how he defines it.
If debt is 12% of the total, then equity is the other 88%!
November 19, 2015 at 8:08 am #283862
noorr
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He has written TOTAL MV which means debt plus equity ie 12 + 88. Sir if he had written only MV , would it have meant only equity then? Thnk u
November 19, 2015 at 8:22 am #283870
John Moffat
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He would never write it that way (because it would not be clear).

He will always say either “debt to total market value” or “debt to equity”.
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