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Commerce · Q257

Business Finance

Graduate and Post Graduate · Commerce · question 257

Q257

The traditional approach towards the valuation of a company assumes that

A.
The overall capitalization rate holds constant with changesin financial leverage
Answer
B.
There is an optimum capital structure
C.
The total risk is not altered by changes in the capital structure
D.
Markets are perfect

Answer: Option A

Solution

Answer: Option A
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