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).

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