What type of income is typically considered in the income based valuation approach?

The income-based valuation approach primarily focuses on the future income that an asset is expected to generate. This method often utilizes the concept of cash flows generated by the business or investment over time, which can translate into tangible income measurements. Among the options provided, dividends and equity represent a direct form of income that investors receive from their investments.

Dividends are cash payments made to shareholders from a corporation's earnings and are a clear indicator of a company's profitability and ability to generate income. When assessing the value of a company or an investment, analysts often forecast future dividends or earnings, discounting those to present value to estimate the current worth of the business. This aligns perfectly with the income-based valuation approach, which relies heavily on evaluating expected income streams.

While the other options pertain to various financial aspects of a business, they do not directly indicate the income perspective necessary for the valuation approach. Market value of assets focuses on the worth of the assets rather than income generation, net present value is a valuation method that considers cash flows but is not a type of income, and cost of goods sold reflects expenses rather than income. Thus, dividends and equity are the correct components to consider for the income-based approach.