--%>
Assignment Help - homework help

Describe Traditional approach of capital structure

Briefly describe Traditional approach of capital structure?

E

Expert

Verified

Traditional approach is also termed as Net income approach however it is the easiest form. It is in between the further two theories termed as Net income theory as well as Net operating income theory. This approach has been formed by Ezta Solomon and Fred Weston. This theory provides the right and correct combination of debt and equity shares and forever lead to improved market value of the firm. This approach informs about the financial risk that will be undertaken by the equity shareholders. This approach points to mainly on raising the cost of equity capital that will be done after a level of debt in the capital structure.

   Related Questions in Business Economics

  • Q : Explain producers in an industry

    Explain producers in an industry are receiving pure or economic profits?

    		•
  • Q : Demand supply with the aim of diagrams

    with the aim of diagrams show the difference between A change in demand and A change in quantity demand

    		•
  • Q : Explain how Entrepreneurs are

    Explain how Entrepreneurs are risk-takers?

    		•
  • Q : Fixed costs and Variable cost

    Questions: 1: Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

    Q : Explanation of theory of pricing for

    The theory of pricing for particular goods explained in Adam Smith’s Wealth of Nations is most consistent along with: (1) mercantilist doctrine. (2) Richard Cantillon’s distinction between “value in

    		•
  • Q : Market system is a profit-and-loss

    Evaluate and explain the statements: “The market system is a profit-and-loss economy”

    		•
  • Q : Utility functions to calculate scores

    Question: 1. Nancy is taking a course in Fairy Tales from Professor Grimm and another in Philosophy from Professor Par. In each course there will be two exams, a midterm exam and a final exam. In Professor Grimm's

    		•
  • Q : Capitalism-Tightly regulate business I

    I have a problem in economics on Capitalism-Tightly regulate business. Please help me in the following question. The govt. in a purely capitalist state would not: (1) Find out the property rights. (2) Enforce contracts among private parties. (3) Offer

    		•
  • Q : The economies of Japan and US Question:

    Question: What can we learn from the Japanese experience? Is the US headed for a 'lost decade? Answer: There was

    		•
  • Q : Neoclassical and heterodox production

    One of my friends can't discover the answer of this question. Give solution of this question. Neoclassical production and cost theory is more realistic than and cost theory and heterodox production. Discuss.

    		•