it seems hat 50% debt and 50% equity are the debt and equity portion which refects the gearing of the company. Therefore this percentage are used to calculate the discount rate.
I know that question have never used the 60% equity and 40% debt percentage rate. May i know when will we use this rate ? ( I know we won't use in this question but i'm quite curious when we will use this rate)
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TAMPEM INC (DEC 2016 ADAPTED)
7y ago#1If the gearing were to remain unchanged.
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