- This topic has 4 replies, 2 voices, and was last updated 10 years ago by
.
Viewing 5 posts - 1 through 5 (of 5 total)
- Posts
The split of Debt/Equity in Dec2015 exam question 1 was:
Assumptions and notes:
1 Debt/Equity 100·0%The solution shows 1/2 each. Is this not then 50% each. I think the question was misleading though.
Please assist what is the explanation of this split in 1/2 each if the question detail was:
Debt/Equity 100%.Please help.
Debt/Equity of 25% would mean something like Debt = 40, equity = 160. This is not the same as Debt/Total capital which would be 40/(40 + 160).
Therefore D/E 100% means 1:1
Thank you but I still cant get it. If the D/E was 50%. What would be the ratio? Wont it be 1:1 as well?
Viewing 5 posts - 1 through 5 (of 5 total)
- You must be logged in to reply to this topic.