If the Capital Structure Is Stable, and Free Cash Flows

question 19

True/False

If the capital structure is stable, and free cash flows are expected to be growing at a constant rate at the horizon date, then the horizon value is calculated by discounting the free cash flows plus the expected future tax shields at the weighted average cost of capital.

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Definitions:

Analogical Representation

A mental representation of one thing that is similar in some way to another; used in problem-solving and reasoning.

Propositions

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Symbolic

Pertaining to symbols or symbolism; using symbols to represent ideas or qualities.

Predicate

The part of a sentence or clause that expresses what is said about the subject and is usually made up of a verb with or without objects, complements, or adverbial modifiers.