Which of the Following Statements Is CORRECT

question 6

Multiple Choice

Which of the following statements is CORRECT?

• A) To implement the corporate valuation model,we discount projected free cash flows at the weighted average cost of capital.
• B) To implement the corporate valuation model,we discount net operating profit after taxes (NOPAT)at the weighted average cost of capital.
• C) To implement the corporate valuation model,we discount projected net income at the weighted average cost of capital.
• D) To implement the corporate valuation model,we discount projected free cash flows at the cost of equity capital.
• E) The corporate valuation model requires the assumption of a constant growth rate in all years.

---

Definitions:

Revolving Door

A metaphor often used to describe the movement of personnel between roles as legislators and regulators and the industries affected by the legislation and regulation, in an ongoing cycle.

Duty of Care

A legal obligation requiring individuals to adhere to a standard of reasonable care while performing acts that could foreseeably harm others.

Negligence Suit

A legal case brought against someone accused of failing to exercise a standard of care, resulting in harm to another person.

Negligently

In a manner characterized by failure to take proper care in doing something, leading to damage or harm.