NOI Approach advocates that the degree of debt financing is ____________.

Relevant

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May be relevant

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Irrelevant

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May be irrelevant

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Solution

The correct option is D Irrelevant
According to the Net Operating Income approach, the capital structure decision of an organization or the firm is irrelevant. Any change in the leverage or in the debt will not change the total value of the firm and also the market price of its shares will remain unaffected.

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Similar questions

A ______ debt-to-equity ratio indicates a lower amount of financing by debt via lenders versus funding through equity via shareholders.

u a^{2} + v β^{2} + γ^{2} + 2 u^{'} β γ + 2 v^{'} γ a + 2 u^{'} a β = 0

a, β, γ

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