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Gearing

Former userFormer user8y ago

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John MoffatJohn MoffatTutor8y ago#1
Gearing can be measured as either debt to equity, or as debt to debt plus equity. Obviously they do not give the same answer, but either measure is valid unless the exam specifies differently. However, if the question specifies that it is to be measured as debt to total market value, then it means debt to debt plus equity (because total market value equals debt plus equity!).
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