Business, 05.11.2019 03:31 kimsouther2

Which of the following statements is correct? a. if a company has a wacc = 12% and its free cash flow is expected to grow at a constant rate of 5%, this implies that the stock's dividend yield is also 5%.b. the free cash flow valuation model for constant growth, vop = fcf1/(wacc − g), can be used to value firms whose free cash flows are expected to decline at a constant rate, i. e., to grow at a negative rate. c. the value of operations of a stock is the present value of all expected future free cash flows, discounted at the free cash flow growth rate. d. the constant growth model cannot be used for a zero growth stock, where free cash flows are expected to remain constant over time. e. the constant growth model is often appropriate for evaluating start-up companies that do not have a stable history of growth but are expected to reach stable growth within the next few years.

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Which of the following statements is correct? a. if a company has a wacc = 12% and its free cash flo...

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