Overall cost of capital, according to ------ approach, decreases up to a certain point, remains unchanged for moderate increase in debt thereafter, and increase beyond a certain point

Related MCQs

• The overall cost of capital, according to which theory, decreases up to a certain point, remains more or less unchanged for moderate increase in debt thereafter and increases a certain point
• A company can increase its value and reduce the overall cost of capital by increasing the proportion of debt in its capital structure according to ----- approach
• Consider the below mentioned statements: 1. A debt-equity ratio of 2:1 indicates that for every 1 unit of equity, the company can raise 2 units of debt. 2. The cost of floating a debt is greater than the cost of floating an equity issue. State True or False:
• If the weighting of equity in total capital is 1/3, that of debt is 2/3, the return on equity is 15% that of debt is 10% and the corporate tax rate is 32%, what is the Weighted Average Cost of Capital (WACC)?
• In case of Net Income Approach, when the debt proportion is increased, the cost of debt:
• A firm has EBIT of . 50,000. Market value of debt is . 80,000 and overall capitalization rate is 20%. Market value of firm under NOI Approach is:
• According to MM approach, two identical firms in all respects except their capital structure can not have different market values or cost of capital because of-----
• Cost of Equity Share Capital is more than cost of debt because:
• A company should arrange the capital structure in such a way that there is maximum flexibility in the capital and cost of capital is
• The cost of debt capital if interest rate is 15% and tax rate is 40% is