net income approach the value provided is a)ko b)ki c)kd d)ke
Answer (1)
Student Expert
21st Jun, 2020
Hi
As according to the question Net income technique indicates that the fee of the firm may be expanded
by lowering the usual value of capital (WACC) through better debt proportion.
Net income approach is also called constant K
e
theory. WACC remains constant and with the increase in debt the price of equity increases. The
average capitalization fee remain steady irrespective of the diploma of leverage.
From the following question the answer is D
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