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What is Traditional or intermediate approach?
Traditional approach suggests that the combination of equity and debt must be accurate in which firm’s market value will be the maximum. According to this theory, there is some limitation of the debt and after that any addition in debt will result the maximum firm value in a decreasing order.  This intermediate approach or traditional approach is also known as WACC approach.

This approach can also be explained by our exam and they say that, the ratio of debt to equity and its optimum value gives lowest worth of WACC and value of the firm will be the highest. But, it is also said that if the value of WACC gets crossed the highest value than firm’s value will start towards downward. It is also clear that with increasing value of debt, its interest will also get increased, though for a certain time period it will remain fixed. Our traditional or Intermediate Approach or WACC Approach Assignment Help team knows that the students require a good knowledge before they start their homework.

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