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CIMA Exam CIMAPRA19-F03-1 Topic 4 Question 40 Discussion
Actual exam question for
CIMA's
CIMAPRA19-F03-1 exam
Question #: 40
Topic #: 4
[All CIMAPRA19-F03-1 Questions]
Topic #: 4
A company has:
* $6 million market value of equity
* $4 million market value of debt
* WACC of 11.04%
* Corporate income tax rate of 20%
According to Modigliani and Miller's theoryof capital structure with tax,what is the ungeared cost of equity?
Suggested Answer:
A
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