- CFA Exams
- CFA Level I Exam
- Topic 3. Corporate Issuers
- Learning Module 6. Capital Structure
- Subject 3. Modigliani-Miller Capital Structure Propositions
CFA Practice Question
MM Propositions without Taxes imply if a company uses more leverage, the equity beta will: A. increase
B. remain the same
C. decrease
Correct Answer: A
The equity beta will be higher as more debt increases the risk to equityholders.
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