Which of the Following Statements Is NOT CORRECT

question 70

Multiple Choice

Which of the following statements is NOT CORRECT?

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

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Definitions:

Light Rays

Streams of photons, which are elementary particles of light, that travel in straight lines and are visible when they encounter an object or substance.

Magnifying Lens

An optical lens or device designed to enlarge the appearance of objects viewed through it.

Light Source

Any device or natural entity that emits light, used to illuminate environments or as part of visual presentations.

Visual Disorders

Conditions that impair the ability to see clearly, which can range from mild visual impairment to complete blindness.