Which of the following approaches advocates that the costs of equity capital and debt capital remain unaltered when the degree of leverage varies?

Which of the following approaches advocates that the costs of equity capital and debt capital remain unaltered when the degree of leverage varies? Correct Answer Net Income Approach

Net Income Approach advocates that the costs of equity capital and debt capital remain unaltered when the degree of leverage varies. Net Income Approach suggests that value of the firm can be increased by decreasing the overall cost of capital (WACC) through higher debt proportion.
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Under which of the following approaches cost of equity capital is assumed to be constant with the change in leverage?
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