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Eduncle posted an MCQ
March 02, 2020 • 23:34 pm 0 points
  • UGC NET
  • Management

Net Income approach to valuation is based on which of the following assumption?

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    Eduncle Best Answer

    The net income approach is based on the following assumptions :
    The cost of debt is cheaper than the cost of equity.
    Income tax has been ignored.
    The cost of debt capital and cost of equity capital remain constant i.e. the use of debt does not change the perception of investors in evaluating the risk.

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