Which of the Following Statements Is FALSE

question 1

Multiple Choice

Which of the following statements is FALSE?

• A) When using the discounted free cash flow model we should use the firm's equity cost of capital.
• B) Intuitively, the difference between the discounted free cash flow model and the dividend-discount model is that in the divided-discount model the firm's cash and debt are
• Included indirectly through the effect of interest income and expenses on earnings in the dividend-discount model.
• C) We interpret rwacc as the expected return the firm must pay to investors to compensate them for the risk of holding the firm's debt and equity together.
• D) The firm's weighted average cost of capital, denoted rwacc, is the cost of capital that reflects the risk of the overall business, which is the combined risk of the firm's equity and debt.

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Definitions:

Financial Future

A term that refers to the projected financial status or health of an individual or entity, taking into consideration income, expenses, savings, and investments.

Financial Goals

Targets, usually defined in monetary terms, that individuals or organizations aim to achieve, such as saving for retirement or paying off debt.

FAFSA

The Free Application for Federal Student Aid, a form used by colleges and universities in the United States to determine a student’s eligibility for financial aid.

Financial Aid

Funding that is available to students to help cover the cost of higher education, including scholarships, grants, and loans.