Calculate gearing ratio using market value

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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.

Reference no: EM132101535

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