Describe Net income approach
Briefly describe Net income approach? Named who recommended this theory?
Expert
Net income (or NI) approach as this is as well termed as traditional approach. This is an approach in that both, equity and cost of debt are independent of capital structure. The constituents that are involved in it are steady and don’t depend on how much debt the firm is using. This theory was recommended by David Durand. In this alter in financial leverage leads to alter in entire cost of capital as well as whole value of firm. If financial leverage rises, weighted average cost reduces and value of firm and market price of equity raises. If this reduces then weighted average cost of capital raises and value of firm and market price of equity reduces. The suppositions that can be made according to this approach is that there are no taxes involved in this and the employ of debt does not alter the risk factor for the investors and will continue the same throughout.
Illustrate other than price many factors determine the outcome?
Adam Smith and the “typical liberal” economists who followed within his footsteps viewed persistent monopolization and market power as: (1) ineffective and best regulated through government. (2) crucial in finding the rate of technological
What happens in the product markets?
Question: Some developing countries have suffered banking crises in which depositors lost part or all of their deposits (in some countries there is no deposit insurance). This type of crisis decreases depositors' confidence in the banking syst
surpluses drives price down,shortages drive up
Explain the definition of Economics?
Please answer each of the exercises below. While you may work together on the homework, you must turn in your own work (in your own words). Homework must be handed in at the beginning of class on the due date unless other arrangements have been made. No late homework will be accepted. Homework wi
Question Would "Victory Points" be a measure of player's "GDP"? If not, then how would you calculate a player's GDP?
The new supply and demand curves within University City are S0 and D0. But after the county commission imposed at $3 per six-pack excise tax upon beer: (w) beer sellers' revenue after taxes decreases by $60,000 monthly. (x) buyers and sellers eac
Illustrate the Law of supply?
18,76,764
1930108 Asked
3,689
Active Tutors
1427432
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!