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The 2 inputs are Consequently the debt ratio in complete money as well as applicable personal debt servicing Expense. The expense of debt for all of the divisions of MC is calculated using the underneath two inputs;

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Utilization of returns may be possibly arithmetic normal or Discover More geometric typical but geometric typical is much more appropriate then arithmetic common as arithmetic average is reflecting simple return around a time period on Preliminary investment, irrespective of the funds gain from interval to time period. On the other hand, geometric ordinary reveals compound return, which makes equilibrium of expense price of previous calendar year a basic principle base for calculation of up coming yr’s return i.