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a- Net Income Approach
b- Net Operating Income Approach
c- Traditional Approach
d- All of the above
Answer c
Traditional approach
Opt C
C. Traditional Approach.
Traditional approach to capital structure advocates that there is a right combination of equity and debt in the capital structure, at which the market value of a firm is maximum.
It means that there exists an optimum value of debt to equity ratio at which the WACC is the lowest and the market value of the firm is the highest.
The correct answer is C
C
Answer: Option C-----Traditional Approach
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