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متابعة

In case of Net Income Approach, the Cost of equity is?

a- Constant

b- Increasing

c- Decreasing

d- None of the above

 

 

 

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تم إضافة السؤال من قبل Divyesh Patel , Assistant Professional Officer- Treasury , City Of Cape Town
تاريخ النشر: 2015/01/15
Sahar Alech
من قبل Sahar Alech , Auditor / Financial Manager , Accounting Services Office

Cost of equity remains constant

georgei assi
من قبل georgei assi , مدير حسابات , المجموعة السورية

The correct answer is A

VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
من قبل VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

Option (a)  >>>>>>>>>  Cost of equity is  Constant.

Alex Al Yazouri
من قبل Alex Al Yazouri , General Manager , Al Mushref Cooperative Society

a- Constant

ايمن محمد عاطف محمد
من قبل ايمن محمد عاطف محمد , Director of the control and regulation unit , ACOLID

A

Net income approach suggested by the Durand. According to this approach, the capital structure decision is relevant to the valuation of the firm. In other words, a change in the capital structure leads to a corresponding change in the overall cost of capital as well as the total value of the firm.

 

According to this approach, use more debt finance to reduce the overall cost of capital and increase the value of firm.

 

Net income approach is based on the following three important assumptions:

 

1. There are no corporate taxes.

 

2. The cost debt is less than the cost of equity.

 

3. The use of debt does not change the risk perception of the investor.

مستخدم محذوف‎
من قبل مستخدم محذوف‎

a- Constant

 

Thank you

Waqas Raza Khan
من قبل Waqas Raza Khan , Accountant , Cold Store Group of Saudi Arabia

A----------Remain Constant

Michael Pawa
من قبل Michael Pawa , cashier , sharjah cooperative society

Answer is A.cost of equity is fixed and continuous

Jijumon James
من قبل Jijumon James , SENIOR ACCOUNTANT , BADR AL SAMAA HOSPITAL

Answer is A

مستخدم محذوف‎
من قبل مستخدم محذوف‎

option

a- Constant

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