Which of the following statements is NOT CORRECT? The corporate valuation model

Question

Which of the following statements is NOT CORRECT? 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 by the wacc – growth rate. The corporate valuation model can be used to find the value of a division. An important step in applying the corporate valuation model is forecasting the firm’s pro forma financial statements. Free cash flows are assumed to grow at a faster rate beyond a specified date in order to find the horizon, or continuing, value.

Explanation / Answer

The following statements is NOT CORRECT

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

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