Which of the following statements about valuing a firm using the compressed adjusted present value (CAPV) approach is most CORRECT?
A. The value of equity is calculated by discounting the horizon value, the tax shields, and the free cash flows at the cost of equity.
B. The value of operations is calculated by discounting the horizon value, the tax shields, and the free cash flows before the horizon date at the unlevered cost of equity.
C. The value of equity is calculated by discounting the horizon value and the free cash flows at the cost of equity.
D. The CAPV approach stands for the accounting pre-valuation approach.
E. The value of operations is calculated by discounting the horizon value, the tax shields, and the free cash flows at the cost of equity.
Answer: B
You might also like to view...
Zhang Corp. owns 40% of Magnor Company's common stock. Magnor pays $97,000 in total cash dividends to its shareholders. Zhang's entry to record the cash dividend received from Magnor would include a:
A. Credit to Cash for $97,000. B. Debit to Dividends for $38,800. C. Debit to Dividends for $97,000. D. Debit to Equity Method Investments for $97,000. E. Credit to Equity Method Investments for $38,800.
A warranty of__________ is applied in a minority of jurisdictions and involves a warranty at the inception of a commercial lease that there are no latent defects in the premises that will prevent the premises from being used for its intended purpose and that the premises will remain in a suitable condition
a. habitability b. merchantability c. suitability d. fitness for a particular purpose
Discrimination based on gender is generally prohibited in developed societies. Cultural relativism, however, may require companies to take different approaches to gender equality in countries where women are segregated from male workers. How should a company practicing CSR deal with such situations?
What will be an ideal response?
COBIT 5 has five domains and seven enablers.
Answer the following statement true (T) or false (F)