i am lost on how the ve of 88 and vd value were calculated. please help
Gearing of Jupiter is 12%, so equity is 88%, and debt is 12%.
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”
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%!
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