CIMA Exam CIMAPRA19-F03-1 Topic 4 Question 40 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam

Question #: 40
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?

A12.00%

B10.16%

C16.24%

D12.54%

Show Suggested Answer

Suggested Answer: A

by Mari at May 08, 2022, 04:26 PM

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