Which of the following statements is NOT CORRECT? why?   The corporate valuation model can be used both for companies that pay dividends and those that do not pay dividends. The corporate valuation model discounts free cash flows to the firm (FCFF) by the required return on equity. The corporate valuation model can be used to find the value of a division. Free cash flows are assumed to grow at a constant rate beyond a specified date in order to find the horizon, or terminal, value.

Q: It is assumed that the Cost of equity and rate of return are both constant under Walter’s Model of…

A: Solution:- Walter’s Model of Dividend is a relevant dividend model, which implies that the dividend…

Q: In which of the following ways can you not take money out of your company? Selling the company to…

A: Ques 23 - Ways you cannot take money out of your company: Selling the company to employees is done…

Q: The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value…

A: Note: As per the honor code, we’ll answer only one question at a time. So, we have answered the…

Q: which of the following statements is false? O When a buyer values a target firm, the appropriate…

A: Going concern value is a value that expects that the organization will remain permanently in the…

Q: Why is the quick ratio considered by some to be a better measure of liquidity than the current…

A: The quick ratio examines a company's short-term liquidity position and assesses its ability to meet…

Q: The cost of retained earnings have the lowest weight in computation of the weighted average cost of…

A: correct answer is (a) The cost of retained earnings have the lowest weight in computation of the…

Q: The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic value…

A: EBIT(1-T) 14600 Net capital exp 2190 N.O.W.C 10 F.C.F 12400 F.C.F=E.B.I.T(1-T)-Net capital…

Q: Discuss the factors that are likely to influence the desired level of cash of a company

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: To what extent do you feel the company’s dividend policies support or hinder their strategies? For…

A: The main aim of any organization should be to increase shareholder value, however for any growth…

Q: Which of the following statements is not correct   O a. Cash balance does not have an opportunity…

A: 1.A firm may hold surplus cash balance to pay dividend to its shareholders. It is correct…

Q: Except for one of the following the constant dividend growth model is useful to corporate managers…

A: The Constant growth in dividends model used to find out the intrinsic value of the company

Q: Answer as either true or false and provide a reason for why.   When a company pays dividends, its…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Choose the correct. Which of the following is not included in the assumption on which Myron Gorden…

A: Gorden Proposed Model: The market value of share is equal to the present value of future dividends.…

Q: A firm is considering the purchase of assets that will increase its fixed operating costs. The firm…

A: Degree of combined leverage = Contribution / Earnings before tax

Q: Which of the following statements on corporate valuation model is CORRECT? Group of answer choices:…

A: Corporate valuation model used to start with the calculation of the asset's value. And, it also…

Q: Which of the following statements is TRUE about the Modigliani and Miller Theory regarding dividend…

A: MM theory was proposed in 1961. It suggests that dividend and capital gain on shares are equivalent…

Q: Which of the following is one of the causes of over capitalization? a. Reduction in the market…

A: Over Capitalization means when a company have huge amount of debt in its book and its Net assists…

Q: Which of the following is/are true regarding payout policy to shareholders? A. Most of the time…

A:

Q: Which of the following statements is false regarding the abnormal earnings approach to valuation?…

A: Abnormal earning valuation This method of valuation helps to determine company’s net worth based on…

Q: The difference between the market value of the firm and the amount of money invested in the firm is…

A: An investor takes into consideration the market value of the company to decide whether investment…

Q: Which of the following is true.     The firm’s ultimate financial goal is to maximize its revenues…

A: Financial goal: The main goal of the firm is to maximize the shareholder's wealth and maximize the…

Q: Which of the following statements about the current ratio is FALSE?   A. The higher the current…

A: Current ratio indicates the short-run liquidity position of the firm and is the ability of a firm to…

Q: Which of the following actions will have the result of increasing financial leverage in the firm? In…

A: Leverage in a firm represents the level of debt in a firm. A firm's leverage is said to increase if…

Q: Which of the following actions should a manager take to optimize the firm's value? * O Changing the…

A: The capital structure is changed with a focus of increasing value of equity and value of firm.

Q: Which of the following statements is NOT CORRECT?   a. The cost of retained earnings is less…

A: The correct option is: b.This statement is not correct because internal equity comprises of retained…

Q: When a firm is deciding how much cash to distribute to stockholders, it should consider two things:…

A: Given: Project Cost of capital Internal rate of return H(High risk) 12% 14% M(Medium risk) 9%…

Q: Which of the following is correct   a. In a leveraged recapitalization, a firm uses its excess…

A: Leveraged Buyouts  is the process of buying another company using money from outside sources, such…

Q: Shareholders want managers to maximize the   (Click to select)   dividend   expected return…

A: Shares refer to a unit that depicts the ownership held by the investor in the capital of the company…

Q: True or False Acceptability is concerned with whether an alternative addresses the key issues…

A: CFROI is the acronym of Cash Flow Return on Investment. It is a formula used to determine how much…

Q: Which of the following is NOT a conclusion drawn from M&M's Propositions 1 and 2? a. Shareholder's…

A: M&M proposition states the value of company is calculated at present value of its future…

Q: The corporate valuation model, the price-to-earnings (P/E) multiple approach, and the economic…

A: Calculate the free cash flows as follows:

Q: Indicate whether its TRUE or FALSE. Then provide a complete explanation! Financial risk is…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: a. Discuss the factors that are likely to influence the desired level of cash of a company

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Which of the following statements is correct? A. If assets and spontaneously generated liabilities…

A: Additional funds needed (AFN) / External financing needed (EFN) is the amount of money a company…

Q: he concept of market efficiency underpins almost all financial theory and decision models. When…

A: Market efficiency is the degree to which current prices accurately represent all available, relevant…

Q: Which of the following statements is NOT CORRECT? The corporate valuation model can be used both for…

A: Corporate valuation is a systematic process to find the true value based on financial data.  Most of…

Q: An analyst values a levered firm by discounting operating free cash flows (OFCF) by the WACC after…

A: Given: EV is the enterprise value E is the Market value of equity OFCF is the Operating free cash…

Q: QUESTION 37 Which of the following statements is true concerning companies that do not pay…

A: Dividends are part of profit received by shareholders. Some investors invest only for capital gains…

Q: Explain the theory behind the free cash flow valuation approach. Why are the free cash flows value…

A: The free cash flows valuation approach will be a theory for determining a company's intrinsic value,…

Q: How much free cash flow (FCF) is Tropetech Inc. expected to generate over the next year?

A: Free Cash Flow tells the amount of cash generated by a company. In short a free cash flow gives the…

Q: A firm wants to reduce its cash conversion cycle sharply.  Which of the following actions should it…

A: Cash conversion cycle is an important metric used in finance. Essentially this metric determines the…

Q: Which one of the following statements is correct? A Modigliani and Miller argued that dividend…

A: Repurchase of shares are alternative procedure to issue dividend by distribution of wealth in the…

Q: An increase in a firm's inclination to pay dividends may be because of a decline in profitable…

A: Dividends are paid by the company to their shareholders as a share of the profits.

Q: Which of the following is NOT a way of stating the overriding goal of financial management? Select…

A: Shareholder wealth maximization is the goal to maximize the share price and thus increase the wealth…