If You Want to Value a Firm That Consistently Pays

question 5

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) method of comparables
• C) dividend-discount model
• D) discounted free cash flow model

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Definitions:

Convergent Thinking

Thinking that produces one correct answer; characteristic of the kind of thinking required on conventional intelligence tests.

General Intelligence

The theory that a single, general intelligence factor underlies all cognitive abilities, allowing individuals to perform a wide range of cognitive tasks.

Correct Answer

An accurate response or solution to a particular question or problem.

Mental Retardation

An outdated and insensitive term formerly used to describe individuals with below-average intellectual functioning and significant limitations in adaptive behaviors; now more commonly referred to as intellectual disability.