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81 romage

Sshilpa9y ago
in calculation of market value of equity and debt (Manufacturing section) why we didn't count Market value of loan stock to get proportion of manufacturing division .Its given gearing estimate is 55% of market value of equity ,doesn't it mean 55 % of equity is debt mv of equity 50/.25 *2.96 =596 50% *596 = gearing ??
John MoffatJohn MoffatTutor9y ago#1
The question does not say that the gearing is 55%. It says that 55% is manufacturing and 45% is property sales (whatever the level of gearing is).
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