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net income approach the value provided is a)ko b)ki c)kd d)ke


Hari 20th Jun, 2020
Answer (1)
Sk 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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