The ordinary shares are quoted at 125 per share loan stock


Question - Consider a company with

Ordinary shares 25 per share, $250,000

Reserves $350,000

7% preference shares of $1 each $250,000

15% unsecured loan stock $150,000

The ordinary shares are quoted at 125 per share, loan stock is trading at $85 per $100 nominal and preference shares.

Calculate gearing ratio using market value.

Solution Preview :

Prepared by a verified Expert
Accounting Basics: The ordinary shares are quoted at 125 per share loan stock
Reference No:- TGS02898119

Now Priced at $25 (50% Discount)

Recommended (97%)

Rated (4.9/5)