According to this approach, capital structure decision is relevant to the value of the firm. An increase in financial leverage will lead to decline in the weighted average cost of capital, While the value of the firm as well as market price of ordinary share will increase. Conversely a decrease in the leverage will cause an increase in the overall cost of capital and a consequent decline in the value as well as market prices of equity shares.
Net Income Approach.pdf.download for more
Net Income Approach.pdf.download for more
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