Economics · Capital Structure Theories
Match List I with List II: List I (Theory) a) Net Income Approach b) Net Operating Income Approach c) Modigliani-Miller Approach (without taxes) d) Traditional Approach List II (Key Feature) 1. Capital structure is irrelevant to firm value 2. Cost of capital remains constant overall / Optimum structure exists at moderate leverage 3. Firm value increases with leverage 4. Overall cost of capital and value remain constant at all levels of leverage Select the correct matching code:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1a-3, b-4, c-1, d-2✓
- 2a-3, b-1, c-4, d-2
- 3a-1, b-2, c-3, d-4
- 4a-4, b-3, c-2, d-1
Correct answer
a-3, b-4, c-1, d-2
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