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Yes it will reduce the gearing because the total equity will be lower. However it is unlikely to reduce the gearing substantially (unless the dividends were very big).
Dear Sir,
I think when total equity reduces, it will increase the gearing (since the denominator reduces), isn’t it? Or do I miss something that can explain?Thank you!
Ooh sorry – I meant to agree with you by saying that it would increase the gearing. I don’t know why on earth I wrote reduce.
Sorry 🙂
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