Which of the Following Statements About Valuing a Firm Using

question 36

Multiple Choice

Which of the following statements about valuing a firm using the APV approach is most CORRECT?

• A) The value of equity is calculated by discounting the horizon value, the tax shields, and the free cash flows at the cost of equity.
• B) The value of operations is calculated by discounting the horizon value, the tax shields, and the free cash flows before the horizon date at the unlevered cost of equity.
• C) The value of equity is calculated by discounting the horizon value and the free cash flows at the cost of equity.
• D) The APV approach stands for the accounting pre-valuation approach.
• E) The value of operations is calculated by discounting the horizon value, the tax shields, and the free cash flows at the cost of equity.