Which of the Following Is False

question 15

Multiple Choice

Which of the following is false?

• A)If we expect the firm to earn a constant cash flow, C, then the stock's price (P) will be equal to C/d where d is the discount factor.
• B)There are often divergent opinions about the future expected cash flows of a stock.
• C)Assuming we can estimate the expected cash flow (C) and the discount factor (d), we can solve for the current value of a share of the stock.
• D)The stock's price will always converge to a value based on a universally held expected value.

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Definitions:

Pericardial

Related to the pericardium, the membrane enclosing the heart.

Peri-

A prefix meaning around or near, used to denote vicinity to a specific body part or time relative to an event.

Around

In a position or movement encircling, near, or surrounding an object or area.

Oligo-

A prefix meaning few or deficient, used in medical terms to indicate a scarcity or lack.