Which of the Following Models Can Be Used to Value

question 14

Multiple Choice

Which of the following models can be used to value a firm without explicitly forecasting that firm's dividends,share repurchases,or its use of debt? I. Dividend-discount model
II) Total payout model
III) Discounted free cash flow model

• A) I only
• B) II only
• C) III only
• D) II and III
• E) I and II

---

Definitions:

Budgeted Cost

This refers to the predicted costs of goods, services, projects, or operations that are planned for a future period.

Merchandise Purchases Budget

An estimate detailing the amount of goods a company plans to purchase over a certain period to meet its sales and inventory needs.

Selling Expenses Budget

A financial plan estimating the costs associated with promoting, selling, and distributing a product or service for a future period.

Sales Budget

An estimate of the sales revenue a company aims to achieve in a certain period, often used for planning and performance evaluation purposes.