A Disadvantage of the Free Cash Flow Valuation Method Is

question 7

Multiple Choice

A disadvantage of the free cash flow valuation method is:

• A) The terminal value tends to dominate the total value in many cases.
• B) The projection of free cash flows depends on earnings estimates.
• C) The free cash flow method is not rigorous.
• D) The free cash flow method is not used widely in practice.

---

Definitions:

World Economic System

Refers to the global network of economic activities, including trade, finance, and production, that interconnects the world's economies.

Second World War

A global conflict that lasted from 1939 to 1945, involving most of the world's nations, marked by significant battles, genocide, and the eventual defeat of Axis powers.

Colonization

The act of establishing control over indigenous people of an area or country, often involving exploitation or displacement of those people.

Colonizing Nations

Countries that establish and maintain colonies in other lands, typically to exploit resources and spread their influence.