Hi John,
I am having some trouble with ungearing the cost of equity for the Tippletine question (Bpp Revision kit Q 22).
I have searched around the forums and also online, seeing your posts where you reference that the question I am about to ask is basic algebra, but I am struggling with the logic and would likely to understand rather than simply learning it by rote.
My understanding is that Kie + 0.4214Kie is essentially 1 * Kie + 0.4214Kei, but I am struggling to understand how 1 * Kie + 0.4214KEI becomes 1.4214Kei.
I assume the reason is that both sides are multiplied by Kei, therefore, they cancel out, but I am struggling to understand why... is it just simply a rule that they cancel out?
Any help would be greatly appreciated - my basic math skills aren't horrific, but it's been 20 odd years since maths class!
Best,
Kyle
Ask the Tutor ACCA AFM
Tippletine: Kie + 0.4214Kie
This is indeed very basic algebra!
If you have 1 apple and add 2 apples then you have three apples.
Similarly, 1x + 2x = 3x
Similarly 1Ke + 2Ke = 3Ke
Similarly 1Ke + 0.4214Ke = 1.04214Ke
Thank you, John.
Yes, I can see how obvious it is now - much appreciated!
You are welcome :-)
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