Which of the Following Is True of the Enterprise Valuation

question 44

Multiple Choice

Which of the following is true of the enterprise valuation model?

• A) Discounts free cash flow to the firm by the cost of equity
• B) Discounts free cash flow to the firm by the weighted average cost of capital
• C) Discounts free cash flow to equity by the cost of equity
• D) Discounts free cash flow to equity by the weighted average cost of capital
• E) None of the above

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Definitions:

Intangible Asset

An asset that lacks physical substance but provides economic value to the company, such as patents, copyrights, and brand names.

Intangible Assets

Assets that lack physical substance but possess economic value, including patents, trademarks, and goodwill.

Land Held

Land held pertains to property owned by an entity as an investment or for future use, not immediately purposed for business operations.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset over its useful life, reducing its book value.