Company X has issued share capital of 1,000,000 x $2 shares; 200,000 x $5 preference shares. There is a loan of $200,000 at 5%. There is a revenue reserve of $1,500,000. What is the Gearing ratio of company X Answers:4,2% 25 % 20% 16,67% The answer is 16, 67% how do you get it?

To calculate the gearing ratio for Company X, we need to use the formula:Gearing Ratio = (Long-term…

Answered: Company X has issued share capital of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Company X has issued share capital of 1,000,000 x $2 shares; 200,000 x $5 preference shares. There is a loan of $ 200,000 at 5%. There is a revenue reserve of $1,500,000. What is the Gearing ratio of company X Answers: 4,2% 25 % 20% 16,67% The answer is 16, 67% how do you get it?