Exam CIMAPRA19-F03-1 Topic 2 Question 81 Discussion
Actual exam question for CIMA's CIMAPRA19-F03-1 exam
Question #: 81
Topic #: 2
Question #: 81
Topic #: 2
The following information relates to Company ZZA's current capital structure:
Company ZZA is considering a change in the capital structure that will increase gearing to 35:65 (Debt Equity).
The risk-free rate is 4% and the return on the market portfolio is expected to be 12%.
The rate of corporate tax is 25%
Using the Capital Asset Pricing Model, calculate the cost of equity resulting from the proposed change to the capital structure.
Company ZZA is considering a change in the capital structure that will increase gearing to 35:65 (Debt Equity).
The risk-free rate is 4% and the return on the market portfolio is expected to be 12%.
The rate of corporate tax is 25%
Using the Capital Asset Pricing Model, calculate the cost of equity resulting from the proposed change to the capital structure.
Suggested Answer: A Vote an answer
by Kerr at Apr 19, 2025, 01:34 PM
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