--%>
Assignment Help - homework help

Describe Traditional approach of capital structure

Briefly describe Traditional approach of capital structure?

E

Expert

Verified

Traditional approach is also termed as Net income approach however it is the easiest form. It is in between the further two theories termed as Net income theory as well as Net operating income theory. This approach has been formed by Ezta Solomon and Fred Weston. This theory provides the right and correct combination of debt and equity shares and forever lead to improved market value of the firm. This approach informs about the financial risk that will be undertaken by the equity shareholders. This approach points to mainly on raising the cost of equity capital that will be done after a level of debt in the capital structure.

   Related Questions in Business Economics

  • Q : Analysis of US GDP and GDP growth rate

    You may use a calculator and MINITAB to conduct the necessary calculations for all questions.  Analysis of US GDP and GDP growth rate (1959-2004). The following variables can be retrieved from MIN

    		•
  • Q : Laissez-faire philosophy of government

    As per to the laissez-faire philosophy of government,: (1) economy works best while all investment decisions are centralized. (2) market system works best along with only minimal government intervention. (3) government must be restricted to stabilizin

    		•
  • Q : Production function for the game

    Question Can you describe what the production function for the game looks like? (How are labour, capital and resources combined? Are there constant, increasing or decreasing returns to scale?) Answer

    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 : International trade to the U.S. economy

    How important is international trade to the U.S. economy?  In terms of volume, does the United States trade more with industrially advanced economies or with developing economies? What country is the United States’ most important trading partner, quantitati

    		•
  • Q : Problem regarding to intermediaries and

    Society gains from the activities of intermediaries which succeed within: (1) falling uncertainty and transaction costs for last consumers. (2) arbitrating strikes and defending workers’ rights. (3) creating productive jobs for unskilled workers

    		•
  • Q : Need of the Economic Efficiency

    Economic efficiency for society needs which the: (i) opportunity costs of all goods be at their lowest possible values. (ii) maximum probable benefits are acquired for given costs. (iii) greatest possible net benefits are squeezed through available re

    		•
  • Q : Explain about the arbitrage except

    Not like speculation, there arbitrage is: (w) an activity which is generally more lucrative when conditions are favorable. (x) a profitable and relatively riskless activity. (y) the process of representing a domestic company within fo

    		•
  • Q : Changing rates of Appreciation and

    Elucidate the changing rates of Appreciation and Depreciation?

    		•
  • Q : Reasons for change in expanded

    What are the reasons for change in expanded production possibilities with women?

    		•