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Q. Show the Net Operating Income approach ?

The NOI (Net Operating Income) approach advocates that the cost of equity increases with the increase in the financial leverage. This is because of increased risk assumed by the equity shareholders because of the use of more debt by the firm. To recompense for increased risk shareholders would expect a higher rate of return on their investments.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M9575459

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