The Terminal Value of a Firm Is Based on Which

question 3

Multiple Choice

The terminal value of a firm is based on which one of these assumptions?

• A)The growth rate of the future cash flows will exceed the firm's WACC.
• B)All future cash flows will be constant.
• C)The cash flows after Time T will diminish on an annual basis.
• D)The cash flows will increase in the future at a constant perpetual rate.
• E)The firm will be sold at Time T for the stated terminal value.

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