81 romage

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May 18, 2017 at 7:12 am #386789
shilpamary
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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 ??
May 18, 2017 at 7:38 am #386800
John Moffat
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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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