Which of the following statements is FALSE?
A) The long-run growth rate gFCF is typically based on the expected long-run growth rate of a firm's revenues.
B) Since a firm's free cash flow is equal to the sum of the free cash flows from the firm's current and future investments, we can interpret the firm's enterprise value as the total net present value (NPV) that the firm will earn from continuing its existing projects and initiating new ones.
C) If a firm has no debt, then rwacc equals the risk-free rate of return.
D) When using the discounted free cash flow model, we forecast a firm's free cash flow up to some horizon, together with some terminal (continuation) value of the enterprise.
Answer: C
You might also like to view...
Which of the following is true regarding the standard error of measurement (SEM)?
A) The SEM is a useful measure of the accuracy of individual scores. B) The higher the SEM, the more accurate the measurements. C) With longer periods between administrations, SEMs are likely to go down. D) If the SEM is 1, then the observed score is the true score.
Direct materials and direct labor costs are examples of variable costs of production
Indicate whether the statement is true or false