Which of the Following Statements Is FALSE

question 30

Multiple Choice

Which of the following statements is FALSE?

• A)The project's free cash flow to equity shows the expected amount of additional cash the firm will have available to pay dividends (or conduct share repurchases)each year.
• B)The value of the project's FCFE should be identical to the NPV computed using the WACC and APV methods.
• C)The value of the project's FCFE represents the gain to shareholders from the project.
• D)Because interest payments are deducted before taxes,we adjust the firm's FCF by their before-tax cost.

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Definitions:

Multiply

The arithmetic process of calculating the result of adding a number to itself a certain number of times.

Simplify

To simplify means to reduce an expression or equation to its simplest form, by combining like terms, reducing fractions, etc.

Combine

The process of uniting two or more expressions into a single expression using mathematical operations.

Simplify

The process of making an expression easier to understand or work with by combining like terms, reducing fractions, etc.