Which of the Following Statements Is FALSE

question 99

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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Definitions:

Narrative Transportation Theory

A theory suggesting that when people lose themselves in a story, their attitudes and intentions can be changed to reflect that story.

Elaboration Likelihood Model

A theory explaining how people are persuaded, distinguishing between two main routes to persuasion: central and peripheral.

Psychological Reactance Theory

A theory suggesting that individuals are motivated to restore their freedom when they experience restrictions or threats to their perceived choices.

Attitude Inoculation

A psychological technique that strengthens a person's resistance to persuasion by exposing them to weak arguments against their viewpoints.