--%>

Define Operating income approach

Describe briefly Operating income approach?

E

Expert

Verified

Operating income approach is the approach that proposes the decision of capital structure in the direction of a firm is immaterial and change in leverage or debt does not result in change of total and market price of the firm. It tells that entire cost of capital is independent of degree of leverage. This approach was also formed by David Durand.

   Related Questions in Business Economics

  • Q : Explain of the law of demand Explain of

    Explain of the law of demand?

  • Q : Describe financial leverage and low

    Describe briefly high financial leverage, low operating leverage?

  • Q : Different types of leverages in

    Write down the different types of leverages which are computed for financial analysis?

  • Q : Theory of wages according to Adam Smith

    Least consistent along with Adam Smith’s theory of wages would be the suggestion that wages vary positively along with the: (w) effort required to learn skills necessary to accomplish particular types of work. (x) stability of employment and the

  • Q : Explain Unemployment Explain

    Explain Unemployment, Growth, and the Future?

  • Q : Illustrate Professional and personal

    Illustrate Professional and personal applications?

  • Q : Speculators activities over the long-run

    Over the long-run the speculators activities are tend to: (1) decrease the volatility of prices. (2) attract legal attention and result in imprisonment. (3) increase the level and volatility of prices both. (4) yield tremendous profits and raise costs

  • Q : Determine the monetary prices while

    Dividing monetary prices from each other yields: (v) nominal prices. (w) relative prices. (x) subjective prices. (y) absolute prices. (z) transaction prices. Hello guys I want your advice. Please recommend some vie

  • Q : Economic crisis situation in Europe

    Question: Describe the present economic crisis situation in Europe.   Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world i

  • Q : Explain the shapes of the

    Specify and explain the shapes of the marginal-benefit and marginal-cost curves and use these curves to determine the optimal allocation of resources to a particular product.  If current output is such that marginal cost exceeds marginal benefit, should more or l