In case of Net Income Approach, when the debt proportion is increased, the cost of debt:

Related MCQs

• 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:
• 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
• In case of Net Income Approach, the Cost of equity is:
• An implicit cost of increasing proportion of debt is:
• 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)?
• Axis Ltd is issuing 15% debentures ( face value Rs60). The net amount realized per debenture is Rs54 and they are redeemable at par after 6 years. At a corporate tax rate of 40%, what is the cost of debt?
• Which of the following is true of Net Income Approach?
• Net Operating Income Approach, which one of the lowing is constant?
• Which one is true for Net Operating Income Approach?
• According to net operating income approach