If You Want to Value a Firm That Consistently Pays

question 3

Multiple Choice

If you want to value a firm that consistently pays out its earnings as dividends,the simplest model for you to use is the

• A)enterprise value model.
• B)total payout model.
• C)dividend-discount model.
• D)discounted free cash flow model.
• E)net present value model

---

Definitions:

Warranty of Title

A guarantee provided by a seller to a buyer that the seller has the right to transfer ownership and no undisclosed encumbrances exist.

Particular Purpose

A specific objective or intended use for which something is designated or implemented.

Implied Warranty of Merchantability

A legal assumption that the goods sold meet certain quality standards, including that they are reasonably fit for their ordinary purpose.

Express Warranty

An explicit promise or assurance made by a seller about the condition, functionality, or quality of a product.