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John Moffat.
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Noah098
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Sir in this questions while calculating the gearing we use MV of equity but book value of debt. Why did we not use combined earnings(which could have been our reserves) and taken nominal value of share capital(the way we calculate the book value of equity=reserves +share capital)
John Moffat
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The answer has not used the book value of debt.
The figure given in the question specifically says that it is the market value.
Noah098
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