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$000
shares 8000
pref shares 2000
bonds 4000shares nominal value 50 cents trading at $5/share
pref shares n.v. $1 trading at 80cents
bonds n.v $ 100 trading $105what is the market value based gearing of the company,defined as prior change capital/equity ?
I really do not understand why you are asking me because the answers are all on the ACCA website, and also I have uploaded lectures of me working through every question in the December 2014 exam (and also every question in the specimen exam)!!
Also, you have not written the whole question – there are also bank loans of 6,200 in the question.
The gearing is: ((4,000 x 1.05) + 6,200 + (2,000 x 0.8)) / (2 x 8,000 x 5) = 15%
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