The First Step in Discounting Cash Flow Is to Forecast

question 37

True/False

The first step in discounting cash flow is to forecast the next 5 years of sales.

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Definitions:

Dividend Policy

A company's strategy for distributing profits back to its shareholders, which can include the timing, amount, and manner of dividend payments.

Dividend Income

Income received from owning shares in a company, typically paid out of the company's profits.

Capital Gains

The profit made from the sale of an asset, such as stocks or property, which exceeds its original purchase price.

Target Payout Ratio

The percentage of net income that a firm aims to pay out to its shareholders as dividends.