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CIMA F3 Financial Strategy
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Free Demo Questions A company is currently all-equity financed. The directors are planning to raise long term debt to finance a new project. The debt:equity ratio after the bond issue would be 30:60 based on estimated market values. According to Modigliani and Miller's Theory of Capital Structure without tax, the company's cost of equity would: A. stay the same. B. decrease. C. increase. D. increase or decrease depending on the bond's coupon rate. ANSWER : C https://www.passexam4sure.com/cima/f3-dumps.html
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