Which of the Following Statements Is FALSE

question 19

Multiple Choice

Which of the following statements is FALSE?

• A)If the firm has no debt, then r_wacc equals the risk-free rate of return.
• B)Because the firm's free cash flow is equal to the sum of the free cash flows from the firm's current and future investments, we can interpret the firm's enterprise value as the total net present value (NPV)that the firm will earn from continuing its existing projects and initiating new ones.
• C)The long-run growth rate g_FCF is typically based on the expected long-run growth rate of the firm's revenues.
• D)When using the discounted free cash flow model, we forecast the firm's free cash flow up to some horizon, together with some terminal (continuation)value of the enterprise.

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Definitions:

Morale

The confidence, enthusiasm, and discipline of a person or group at a particular time.

Absenteeism

The habitual non-presence of an individual supposed to be at work, school, or other engagements often without valid reason.

Past Time Viewpoint

Referring to events or states of affairs that happened in the past, often used to give background or context in narratives.

Present Tense

A verb tense that expresses actions or states occurring at the current moment.