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The arbitrary process is the behavioral foundation for the

This question belongs to Commerce Financial Management
Financial Management
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The arbitrary process is the behavioral foundation for the ____________.

Answer & Solution
Correct Answer: Option A
The arbitrary process is the behavioral foundation for the MM approach. The MM approach favors the Net operating income approach and agrees with the fact that the cost of capital is independent of the degree of leverage and at any mix of debt-equity proportions.
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