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last time i asked
“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)”
and you have replied as “if the gearing were to remain unchanged”
what is it mean by if the gearing were to remain unchanged ? we have only used 50% and 50% for the question and the question have not used 60% and 40%.
So when will we use 60%equity and 40%debt ?
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