When Conducting Discounted Cash Flow (DCF)valuation Using Free Cash Flow

question 15

Multiple Choice

When conducting discounted cash flow (DCF) valuation using free cash flow to equity,the appropriate discount rate is:

• A) Weighted average cost of equity
• B) Risk-adjusted cost of equity
• C) Cost of debt
• D) Risk-adjusted cost of debt

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Definitions:

High Pay Rates

Compensation levels significantly above the average or norm, often to reflect skill, demand, or performance levels.

Training Investment

The allocation of resources by an organization towards the development of its employees' skills and knowledge.

Topping Out

A construction milestone where the last beam is placed atop a structure during its erection.

Reward System

A mechanism for providing incentives or compensation in recognition of achievements, behavior, or performance.