Reading 41: Free Cash Flow Valuation-LOS c习题精选 div, class, center, discount

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Session 12: Equity Investments: Valuation Models
Reading 41: Free Cash Flow Valuation

LOS c: Contrast the ownership perspective implicit in the FCFE approach to the ownership perspective implicit in the dividend discount approach.

 

 

 

The ownership perspective implicit in the dividend valuation approach is of:

A) control.

B) a preferred stockholder.

C) a common stockholder.

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Dividends are most relevant to the stockholders who receive them and who have little control over their amount.

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The ownership perspective implicit in the free cash flow to equity valuation approach is of:

A) control.

B) a preferred stockholder.

C) a minority position.

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Dividend policy can be changed by the buyer of a firm. Thus, the free cash flow perspective looks to the source of dividends in a position of control rather than directly at dividends.

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A control perspective is most consistent with which of the following valuation approaches?

A) Dividends.

B) Price to enterprise value.

C) Free cash flow (FCF).

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Dividend policy can be changed by the buyer of a firm. Thus, the FCF perspective looks to the source of dividends in a position of control rather than directly at dividends. The price to enterprise value approach does not focus on cash flows.