Which of the Following Is the Appropriate Way to Calculate

question 23

Multiple Choice

Which of the following is the appropriate way to calculate the price of a share of a given company using the free cash flow valuation model?

• A) P0 = Div1/(rE - g)
• B) P0 = PV(Future Free Cash Flow of Firm) / (Shares Outstanding0)
• C) P0 = [Div1 / (rE - g)] / (Shares Outstanding0)
• D) P0 = (V0 + Cash0 - Debt0) / (Shares Outstanding0)

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