Which of the Following Statements Is FALSE

question 99

Multiple Choice

Which of the following statements is FALSE?

• A)In the flow-to-equity valuation method,the cash flows to equity holders are then discounted using the weighted average cost of capital.
• B)In the WACC and APV methods,we value a project based on its free cash flow,which is computed ignoring interest and debt payments.
• C)In the flow-to-equity (FTE)valuation method,we explicitly calculate the free cash flow available to equity holders taking into account all payments to and from debt holders.
• D)The first step in the FTE method is to determine the project's free cash flow to equity (FCFE).

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Definitions:

(COCl)2

Phosgene gas, a toxic compound used in organic synthesis, characterized by the formula, with two carbonyl chloride groups.

Nucleophilic Acyl Substitution

A type of organic reaction where a nucleophile replaces a leaving group in an acyl compound, forming a new covalent bond.

Esters

Organic compounds derived from an acid where at least one -OH (hydroxyl) group is replaced by an -O- (alkoxy) group, known for their fruity smells.

Amides

Organic compounds containing a carbonyl group linked to a nitrogen atom from an amine, fundamental in the structure of proteins.