If You Want to Value a Firm but Do Not

question 21

Multiple Choice

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

• 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.

---

Definitions:

Passive Resignation

An attitude of helplessness in which individuals give up trying to cope with threats or to achieve goals because they believe that no action of theirs can be fruitful.

Social Pecking Order

The hierarchical system of social organization within a group, in which individuals are ranked in terms of dominance and subordination.

Viral Infections

Diseases caused by viruses, microscopic organisms that can lead to various illnesses, from the common cold to more severe diseases.

Perceived Control

The belief or feeling that one can influence the events in their life and the outcomes of situations they are in.