Which of the Following Statements Is NOT CORRECT

question 40

Multiple Choice

Which of the following statements is NOT CORRECT?

• A) The corporate valuation model can be used both for companies that pay dividends and those that do not pay dividends.
• B) The corporate valuation model discounts free cash flows by the required return on equity.
• C) The corporate valuation model can be used to find the value of a division.
• D) An important step in applying the corporate valuation model is forecasting the firm's pro forma financial statements.
• E) Free cash flows are assumed to grow at a constant rate beyond a specified date in order to find the horizon,or continuing,value.

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Definitions:

Feasibility

The measure of how achievable, practical, or viable a proposed plan or project is based on existing conditions and resources.

Idea

A thought, plan, or suggestion about what to do, often implying creativity or innovation.

Opportunity

A set of circumstances that makes it possible to do something, especially something that might lead to success or advancement.

Business Plan

A document that outlines a company's strategic direction, goals, and the methods it will use to achieve those goals.