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Simple is this! May be the next line clear it more.
“In this question Gearing refers to (total debt to total market value) and as we all know that total market value = Total debt + Equity”
Muhaimin is correct – gearing can be defined in more than one way, but the examiner has said in the question how he defines it.
If debt is 12% of the total, then equity is the other 88%!He has written TOTAL MV which means debt plus equity ie 12 + 88. Sir if he had written only MV , would it have meant only equity then? Thnk u
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