A Disadvantage of the Free Cash Flow Valuation Method Is

question 7

Multiple Choice

A disadvantage of the free cash flow valuation method is:

• A) The terminal value tends to dominate the total value in many cases.
• B) The projection of free cash flows depends on earnings estimates.
• C) The free cash flow method is not rigorous.
• D) The free cash flow method is not used widely in practice.

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Definitions:

Conjunction

In grammar, a word used to connect clauses or sentences or to coordinate words in the same clause.

Symbolize

The act of representing something using symbols or symbolism.

Neither

A conjunction used to indicate that two or more specified alternatives are not the case.

Antecedent

The first part of a conditional statement, the "if" clause, indicating the condition in a hypothetical proposition.