--%>

Define Operating income approach

Describe briefly Operating income approach?

E

Expert

Verified

Operating income approach is the approach that proposes the decision of capital structure in the direction of a firm is immaterial and change in leverage or debt does not result in change of total and market price of the firm. It tells that entire cost of capital is independent of degree of leverage. This approach was also formed by David Durand.

   Related Questions in Business Economics

  • Q : Introduction of the term Operating

    Give a brief introduction of the term Operating Leverage?

  • Q : Economic bailout of Spain and Greece

    Question: Conduct an analysis on the following topic and prepare an Executive Summary-style report with supporting exhibits (Insightful Graphs, tables etc. from quality expert analyst references used to write the r

  • Q : Define the Legal forms of businesses

    Define the Legal forms of businesses?

  • Q : Illustrate Rational Behaviour of

    Illustrate Rational Behaviour of Economic Perspective?

  • Q : Describe Spillovers and externalities

    Describe Spillovers and externalities?

  • Q : Firms operating under Cournot

    Question: Suppose three identical firms are engaged in Cournot competition in quantities. They all have marginal costs equal to 40. Market demand is given by:

    Q : Next Generation Manufacturing Strategy

    This Assignment assesses the following module Learning Outcomes:1. Describe current production concepts and techniques in formulating a manufacturing strategy.2. Discuss the development and implementation of manufacturing strategies in the busi

  • Q : Real rate of interest Question: Hubbard

    Question: Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  • Q : Illustrate receipts from several

    Illustrate how receipts come from several sources in Federal Finance?

  • Q : Demand often exceeds supply and supply

    “In the corn market, demand often exceeds supply and supply sometimes exceeds demand.” “The price of corn rises and falls in response to changes in supply and demand.” Among these 2 statements used correctly which in the terms “supply&rdq