Which of the Following Statements Is False

question 72

Multiple Choice

Which of the following statements is false?

• A) In a share repurchase, the firm uses excess cash to buy back its own stock.
• B) The discounted free cash flow model begins by determining the value of the firm's equity.
• C) The discounted free cash flow model focuses on the cash flows to all of the firm's investors, both debt and equity holders, and allows us to avoid estimating the impact of the firm's borrowing decisions on earnings.
• D) In recent years an increasing number of firms have replaced dividend payouts with share repurchases.

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Definitions:

Central Processing

A cognitive processing route that involves careful and thoughtful consideration of persuasive message content.

Peripheral Processing

A mode of information processing in persuasion that involves focusing on superficial cues rather than the central content of the message, often leading to temporary attitude change.

Need For Cognition

A tendency to engage in and enjoy effortful thinking, analysis, and mental problem solving.

Personal Relevance

Degree to which people expect an issue to have significant consequences for their own lives.