If You Want to Value a Firm but Do Not

question 47

Multiple Choice

If you want to value a firm but do not want to explicitly forecast its dividends,what is the simplest model for you to use?

• A)the discounted free cash flow model
• B)the dividend-discount model
• C)the enterprise value model
• D)None of the above models can be used if you do not want to forecast dividends or use of debt.

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Definitions:

\(5x+9\)

An algebraic expression representing a linear function.

\(x-5\)

An algebraic expression representing a value five less than the variable x.

Transformation

A process by which a shape is changed through operations such as rotation, reflection, translation, or resizing, altering its position or size but not its fundamental characteristics.

Composition

In mathematics, the composition of functions refers to the application of one function to the results of another.