Which of the Following Statements Is FALSE

question 2

Multiple Choice

Which of the following statements is FALSE?

• A) If the firm has no debt, then rwacc equals the risk-free rate of return.
• B) When using the discounted free cash flow model, we forecast the firm's free cash flow up to some horizon, together with some terminal (continuation) value of the enterprise.
• C) Because the firm's free cash flow is equal to the sum of the free cash flows from the firm's current and future investments, we can interpret the firm's enterprise value as the total net present value (NPV) that the firm will earn from continuing its existing projects and initiating new ones.
• D) The long-run growth rate gFCF is typically based on the expected long-run growth rate of the firm's revenues.

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Definitions:

Animal Training

The practice of teaching animals specific responses to specific conditions or stimuli, often used for companionship, service, or entertainment.

Emotional Reactions

The spontaneous and often unconscious responses to events or stimuli that involve feelings, physiological arousal, and changes in behavior.

Reaction Time

The amount of time it takes to respond to a stimulus.

Observable Behaviours

Observable and quantifiable behaviors or responses of a person to either external or internal factors.