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Using the Formula Gearing Ratio = Long-Term Liabilities/(shareholders' Funds

Question 43

Multiple Choice

Using the formula gearing ratio = long-term liabilities/(shareholders' funds + long-term liabilities) × 100/1, calculate the gearing ratio from the following information. Long-term liabilities are $18m; shareholders' funds are $14m.


A) 44%
B) 128%
C) 78%
D) 56%

Correct Answer:

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