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In part (c) of the question there is a calculation of EVA.
in that market gearing ratio is calcuted = debt /(debt + equity) = 45 m/(45m+(25*m4*16.2)) = 0.027
Can anyone please tell me what this m4 is ?
The ‘4m’ stands for 4 million!!
The shares are 25c shares and so there are 4 times as many shares as the total nominal value on the SOFP.
(There is not much point in heading up your post ‘Question 64’ without saying which book you are using 🙂 )
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