Match the following.
| List-I | List-II |
| a. Net income approach | 1. Also known as 'Intermediate Approach' |
| b. Net operating income approach | 2. Change in the capital structure of a company does not affect the market value of the company and overall cost of capital |
| c. Traditional approach | 3. It provide analytical sound and logically consistent behavioural justification for their hypothesis |
| d. Modigliani Miller approach | 4. A firm can minimise the overall cost of capital by using debt financing to the maximum extent |
A. a-4, b-2, c-1, d-3
B. a-2, b-1, c-4, d-3
C. a-3, b-4, c-1, d-2
D. a-2, b-1, c-3, d-4
Answer: Option A
This Question Belongs to Commerce >> Business Finance
The appropriate ratio for indicating liquidity crisis is
A. Operating ratio
B. Sales turnover ratio
C. Current ratio
D. Acid test ratio
A. Net present value method
B. Internal rate of return method
C. Profitablity index method
D. None of the above
A. a-4, b-3, c-1, d-2
B. a-3, b-4, c-1, d-2
C. a-2, b-3, c-1, d-4
D. a-3, b-2, c-4, d-1
Which one of the following assumptions is not included in the James E. Walter Valuation model?
A. All financing by retained earnings only
B. No change in the key variables such as EPS and DPS
C. The firm has finite life
D. All earnings are either distributed as dividends or invested internally immediately
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