MOST IMPORTANT MCQ
BUSINESS FINANCE
UGC NET COMMERCE / MANAGEMEN
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, Question 1
Consider the following statements in relation to theories of
Capital Structure and identify the correct code:
Statement I: In Net Income Approach, Ko increases with the
increase in leverage.
Statement II: In Net Operating Income Approach, Ke will change
with the degree of leverage.
Codes:
1. Statement I only is true
2. Statement II only is true
3. Both the statements are true
4. None of the statements is true
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, Approaches of Capital Structure
Net Income Approach
There is a relationship between the Capital
Structure and the value of the firm.
Assumptions
(1) Total Capital requirement of the firm are
given and remain constant
(2) Kd < Ke
(3) Kd and Ke are constant
(4) Ko decreases with the increase in leverage.
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BUSINESS FINANCE
UGC NET COMMERCE / MANAGEMEN
Today
11:30 AM
LIVE SESSION BY SUMANT SIR
www.everstudy.co.in
, Our Courses
UNIT SNAPSHOT | NET COMMERCE & MANAGEMENT FREE
UNITWISE PAST PAPERS (EXPLAINED) | NET COMMERCE Rs. 549 R
COMPLETE TEST SERIES | NET COMMERCE Rs. 1299 R
VIDEO COURSE ON NEW TOPICS |NET COMMERCE Rs. 2499 R
VIDEO COURSE ON LEGAL ASPECTS OF BUSINESS Rs. 1199 R
www.everstudy.co.in
, Question 1
Consider the following statements in relation to theories of
Capital Structure and identify the correct code:
Statement I: In Net Income Approach, Ko increases with the
increase in leverage.
Statement II: In Net Operating Income Approach, Ke will change
with the degree of leverage.
Codes:
1. Statement I only is true
2. Statement II only is true
3. Both the statements are true
4. None of the statements is true
www.everstudy.co.in
, Approaches of Capital Structure
Net Income Approach
There is a relationship between the Capital
Structure and the value of the firm.
Assumptions
(1) Total Capital requirement of the firm are
given and remain constant
(2) Kd < Ke
(3) Kd and Ke are constant
(4) Ko decreases with the increase in leverage.
www.everstudy.co.in
