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Hi Tutor ,
I had a doubt on the D/E ratio used in this question for -Hazium co – Dec 2010.
From the question the following can be calculated Ve= 15*2.53=37.95M & Vd=40*94.88/100=37.952M ,
so based on the calculation =37.952/37.95= 1.00, then why has it been assumed D/E=1 when it can be calculated ?Regards,
RMRI am not quite sure what your problem is.
He has calculated Ve and Vd. D/E is not exactly 1, but since it is almost 1 he has continued using 1 instead of using the precise figure.Thank you tutor , I got confused as it was written on the solution “Assume D/E=1”.
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