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CFA Level 2 - Equity Valuation - Free Cash Flow Valuation
Intermediate
1/24
Which of the following statements about free cash flow to the firm (FCFF) valuation is most accurate?
a.
In the FCFF approach, the enterprise value is found by discounting the after-tax cash flows to debt and preferred stock holders
b.
FCFF discounts the cash flows available to all providers of capital at the weighted average cost of capital (WACC)
c.
FCFF valuation discounts the levered cash flows to equity holders at the cost of equity capital
Intermediate