Q.
1
Assertion (A): According to Net Income (NI) approach, capital structure decision is relevant in the valuation of firm.
Reason (R): A firm can change its total value and its overall cost of capital by change in the degree of leverage in its capital structure.
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A
Both (A) and (R) are correct and (R) is the right explanation of (A).
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B
Both (A) and (R) are correct and (R) is not the right explanation of (A).
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C
Both (A) and (R) are incorrect.
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D
(A) is correct and (R) is not correct.