Economics · Financial Management
Match List I (Theory of Capital Structure) with List II (Key Feature) and choose the correct option: List I A. Net Income (NI) Approach B. Net Operating Income (NOI) Approach C. Traditional Approach D. Modigliani-Miller (MM) Approach (without taxes) List II1. Capital structure is completely irrelevant to the value of the firm2. Value of the firm increases continuously with an increase in leverage3. An optimum capital structure exists where cost of capital is minimized4. Overall cost of capital remains constant regardless of leverage change
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A-4, B-2, C-3, D-1
- 2A-2, B-3, C-4, D-1
- 3A-3, B-2, C-4, D-1
- 4A-2, B-4, C-3, D-1✓
Correct answer
A-2, B-4, C-3, D-1
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