A listed company’s capital employed as at 31 December 2012 was £8,000,000. This amount includes the items shown on the right. Which capital gearing calculation shown below would you accept as correct?

(a) £500,000/£8,000,000 × 100 = 6.25%

(b) £500,000 + £2,000,000/£8,000,000 × 100 = 31.25%

(c) £2,000,000/£8,000,000 × 100 = 25%

(d) £8,000,000 − £500,000 − £2,000,000/£8,000,000 × 100 = 68.75%

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8% Loan notes 6% Preference shares £'000 500 2,000