Free cash flow valuation model discounts free cash flows

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Reference no: EM131188034

Which of the following statements is NOT CORRECT?

The free cash flow valuation model discounts free cash flows by the required return on equity.

The free cash flow valuation model can be used to find the value of a division.

An important step in applying the free cash flow valuation model is forecasting the firm's pro forma financial statements.

Free cash flows are assumed to grow at a constant rate beyond a specified date in order to find the horizon, or terminal, value.

The free cash flow valuation model can be used both for companies that pay dividends and those that do not pay dividends.

Reference no: EM131188034

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