What needs to be known for the MM Propositions?
I ask because CFAI EOC and textbook has some extra formulas (equations as they call them) whereas I’ve seen third party providers with only the four equations.
Do we need to know how to calculate, or only “explain”?
I noticed the same. I ended up memorizing the additional cost of equity questions from the CFAI material to be safe.
Thanks - tend to agree!
Anybody else have an opinion?
You should know how a levered firm and a unlevered firm are affected under each proposition so you can derive the value of each other, I remember that the EOC has a question related in calculating the value of a levered firm from an unlevered firm or viceversa