In Estimating Continuing Value,how Does Assuming That RONIC = WACC

question 17

Multiple Choice

In estimating continuing value,how does assuming that RONIC = WACC as opposed to assuming RONIC ≠ WACC affect the importance of assumptions concerning growth?

• A)Assumptions concerning growth do not change in importance.
• B)Assumptions concerning growth become unimportant when RONIC = WACC.
• C)Assumptions concerning growth become more important when RONIC = WACC.
• D)Assumptions concerning growth become less important when RONIC = WACC but are still important.

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