Q. According to traditional approach, the average cost of capital (Solved)
1. Remains constant up to a degree of leverage and rises sharply thereafter with every increase in leverage.
2. Rises constantly with increase in leverage.
3. Deceases up to a certain point, remains unchanged for moderate increase in leverage and rises beyond a certain point.
4. Decreases at an increasing rate with increase in leverage.
- c. Deceases up to a certain point, remains unchanged for moderate increase in leverage and rises beyond a certain point.