Which of the Following Statements Is False

question 31

Multiple Choice

Which of the following statements is false?

• A) In the flow-to-equity valuation method, the cash flows to equity holders are then discounted using the weighted average cost of capital.
• B) In the WACC and APV methods, we value a project based on its free cash flow, which is computed ignoring interest and debt payments.
• C) In the flow-to-equity (FTE) valuation method, we explicitly calculate the free cash flow available to equity holders taking into account all payments to and from debt holders.
• D) The first step in the FTE method is to determine the project's free cash flow to equity (FCFE).

---

Definitions:

Conditioned Taste Aversion

An acquired response where an individual avoids consuming a certain food or drink because it has been associated with an unpleasant outcome, such as nausea or sickness.

Evolutionary Theory

A scientific explanation for the diversity of life, proposing that species change over time through natural selection and genetic variation.

Associative Learning

A learning process by which a connection or association is made between two stimuli or between a behavior and a stimulus.

Psychologist

A professional specializing in the study of the mind and behavior, often providing therapy and counseling services.