When Conducting Discounted Cash Flow (DCF)valuation Using Free Cash Flow

question 37

Multiple Choice

When conducting discounted cash flow (DCF) valuation using free cash flow to equity, the appropriate discount rate is:

• A)Weighted average cost of capital of the target firm
• B)Risk-adjusted cost of equity of the target firm
• C)Risk-adjusted cost of equity of the acquiring firm
• D)Weighted average cost of capital of the acquiring firm

---

Definitions:

Developmental Theories

Theoretical approaches to understanding the sequence, patterns, and mechanisms of growth, change, and consistency throughout the human life span.

Moral Developmental Level

Stages of growth individuals go through as they develop the ability to think about moral problems, including recognition of moral issues, making moral judgments, and establishing personal moral codes.

Lifespan Perspective

An approach in psychology that emphasizes developmental changes throughout an individual's life, from birth to death.

Behavioural Problems

Difficulties or disturbances in an individual's actions and reactions that negatively affect their daily living.