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Tippletine: Kie + 0.4214Kie

KKyle4y ago
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
John MoffatJohn MoffatTutor4y ago#1
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
KKyle4y ago#2
Thank you, John. Yes, I can see how obvious it is now - much appreciated!
John MoffatJohn MoffatTutor4y ago#3
You are welcome :-)
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