Which of the following models can be used to value a firm without explicitly forecasting that firm's dividends,share repurchases,or its use of debt? I. Dividend-discount model
II)Total payout model
III) Discounted free cash flow model

Question

Quizplus · Accepted Answer

The discounted free cash flow (DCF) model can be used to value a firm without explicitly forecasting its dividends, share repurchases, or use of debt. This is because the DCF model is based on projecting a firm's future free cash flows and discounting them back to the present value using a required rate of return. The dividend-discount model, on the other hand, explicitly relies on forecasting the firm's future dividend payments, and the total payout model focuses on the firm's historical or expected dividend and share repurchase behavior. Therefore, the best choice is C) III only, as the DCF model does not rely on explicit forecasting of dividends, share repurchases, or debt use.

Which of the Following Models Can Be Used to Value