Equity
Gearing Formula
Equity Gearing is calculated
by dividing debt with Equity.
Capital Gearing = Debt
Financing
Equity Financing
Equity
Gearing Formula Example
XYZ Company has issued debenture of $ 100 million;
XYZ Company has issued 20 million shares @ 10. Calculate the Equity Gearing
Solution
Equity Gearing = Debt
Financing x 100
Equity Financing
= (100/200) x 100
= 50%
