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Capital Structure, Cost of Capital and Valuation

Learning Objectives

• Review the assumptions, definitions and symbols relating to capital structure theories

• Explain the major capital structure theories—Net Income Approach, Net Operating Income Approach, Modigliani and Miller (MM) Approach and Traditional Approach—and evaluate them to explore the relationship between leverage and cost of capital from the standpoint of valuation











Khan & Jain: FM, 5eOnline Learning Center

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