FLY4000 Pilot Paper question

In the pilot paper question, they ask us to calculate the cost of equity capital for Flihi using CAPM then write down the assumptions. One of the assumption mentions: All of the assumptions inherent in theories of Modigliani and Miller whose gearing formulae we have applied, ie - investors are rational and risk averse - capital markets are perfect - Investors and companies can freely borrow at the same risk-free rate, hence individuals are indifferent between personal and corporate borrowings Can you please help me understand since we calculated cost of equity using CAPM, why are we writing this assumption and how did we use M&M gearing formulae and what is M&M gearing formula, I know the theories of M&M with tax and no tax but what is gearing formula and how does it apply as an assumption here?