--%>

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 the volume and pattern of U.S.

    Explain the volume and pattern of U.S. and World Trade?

  • Q : How do households dispose of their

    How do households dispose of their income?

  • Q : Who is a normal resident Normal

    Normal resident: The persons or an institution who lives in a country and whose centre of interest lies in that country is termed as a normal resident of that country.

  • Q : Comparative advantage in production I

    I have a problem in economics on Comparative advantage in production. Please help me in the following question. The oranges are grown in Florida and potatoes are grown in Maine mainly since: (i) orange-grower’s in Maine have not lobbied effectiv

  • Q : Define the term Weak-form market

    Define the term Weak-form market efficiency. Explain briefly.

  • Q : Initial systematic and popular

    The initial systematic and popular description of capitalism was explained in: (1) Sir Thomas Mun’s England’s Treasure by Foreign Trade. (2) Joseph A. Schumpeter’s Capitalism, Socialism, and Democracy. (3) John Maynard Keynes’

  • Q : Significant that economics is not a

    Why is it significant that economics is not a laboratory science?  What problems may be evolved in deriving and applying economic principles?

  • Q : Major type of expenditure at the state

    What is the most important source of revenue and the major type of expenditure at the state level?  

  • Q : Price charges of firm in perfectly

    Assume that the equilibrium price within a perfectly competitive industry is $15 and a firm into the industry charges $21 there. Which of the given will occur: w) the firm's profits will rise. x) The firm's revenue will rise. y) The firm will not sell

  • Q : Allocative Mechanisms-market based

    The market-based economic system: (1) Appears to be ‘natural’ as it has existed in all societies. (2) Has dominated the economic relationships in United States since from the year1492. (3) Guided resource allocation in middle ages. (4) Is