13. Which of the following is true of the equity valuation model? a.  
13. Which of the following is true of the equity valuation model?
a. Discounts free cash flow to the firm by the weighted average cost of capital
b. Discounts free cash flow to equity by the cost of equity
c. Discounts free cash flow the firm by the cost of equity
d. Discounts free cash flow to equity by the weighted average cost of capital
e. None of the above
Homework Answers
Discounts free cash flows to equity by the cost of equity
Option B is true of the equity valuation model. Other options are wrong.
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13. Which
of the following is true of the equity valuation model?
a.  
Which of the following is true of the equity valuation model? a. Discounts free cash...
Which of the following is true of the equity valuation model? a. Discounts free cash flow to the firm by the weighted average cost of capital b. Discounts free cash flow to equity by the cost of equity c. Discounts free cash flow the firm by the cost of equity d. Discounts free cash flow to equity by the weighted average cost of capital e. None of the above
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Basic Stock Valuation: Free Cash Flow Valuation Model The recognition that dividends are dependent on earnings, so a reliable dividend forecast is based on an underlying forecast of the firm's future sales, costs and capital requirements, has led to an alternative stock valuation approach, known as the free cash flow valuation model. The market value of a firm is equal to the present value of its expected future free cash flows: Market value of company FCF (1+WACC) + FCF (1+WACC)...
Which one of the following factors is not considered in calculating the firm’s cost of equity? risk free rate of retu...
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3. Fundamentals of the free cash flow corporate valuation model Aa Aa E Several methods can...
3. Fundamentals of the free cash flow corporate valuation model Aa Aa E Several methods can be used to compute the intrinsic value of a share of a company's common stock. One method uses the free cash flow (FCF) valuation model, while the another method uses the dividend discount model. The FCF valuation model computes a firm's value-also called its the value of its operating activities (Vop) and the value of firm's nonoperating value-as the sum of , where: the...
3. Fundamentals of the free cash flow corporate valuation model Aa Aa E Several methods can...
3. Fundamentals of the free cash flow corporate valuation model Aa Aa E Several methods can be used to compute the intrinsic value of a share of a company's common stock. One method uses the free cash flow (FCF) valuation model, while the another method uses the dividend discount model. The FCF valuation model computes a firm's value-also called its the value of its operating activities (Vop) and the value of firm's nonoperating value-as the sum of , where: the...
8. Corporate valuation model The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic...
8. Corporate valuation model The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value added (EVA) approach are some examples of valuation techniques. The corporate valuation model is similar to the dividend-based valuation that you’ve done in previous problems, but it focuses on a firm’s free cash flows (FCFs) instead of its dividends. Some firms don’t pay dividends, or their dividends are difficult to forecast. For that reason, some analysts use the corporate valuation model. Sixty Second...
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8. Corporate valuation model The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic...
8. Corporate valuation model The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value added (EVA) approach are some examples of valuation techniques. The corporate valuation model is similar to the dividend-based valuation that you’ve done in previous problems, but it focuses on a firm’s free cash flows (FCFs) instead of its dividends. Some firms don’t pay dividends, or their dividends are difficult to forecast. For that reason, some analysts use the corporate valuation model. Stay Swift...
Corporate valuation model The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value...
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Basic Stock Valuation: Free Cash Flow Valuation Model The recognition that dividends are dependent on earnings, so a reliable dividend forecast is based on an underlying forecast of the firm's future sales, costs and capital requirements, has led to an alternative stock valuation approach, known as the free cash flow valuation model. The market value of a firm is equal to the present value of its expected future free cash flows: Market value of company FCF (1+WACC) + FCF (1+WACC)...
3. Fundamentals of the free cash flow corporate valuation model Aa Aa E Several methods can be used to compute the intrinsic value of a share of a company's common stock. One method uses the free cash flow (FCF) valuation model, while the another method uses the dividend discount model. The FCF valuation model computes a firm's value-also called its the value of its operating activities (Vop) and the value of firm's nonoperating value-as the sum of , where: the...
3. Fundamentals of the free cash flow corporate valuation model Aa Aa E Several methods can be used to compute the intrinsic value of a share of a company's common stock. One method uses the free cash flow (FCF) valuation model, while the another method uses the dividend discount model. The FCF valuation model computes a firm's value-also called its the value of its operating activities (Vop) and the value of firm's nonoperating value-as the sum of , where: the...
10. Corporate valuation model The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value added (EVA) approach are some examples of valuation techniques. The corporate valuation model is similar to the dividend-based valuation that you've done in previous problems, but it focuses on a firm's free cash flows (FCFS) instead of its dividends. Some firms don't pay dividends, or their dividends are difficult to forecast. For that reason, some analysts use the corporate valuation model. Blur Corp....
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