The equity valuation method involving zero explicitly forecasted dividends and an adjustment to working capital to strip surplus cash is called?
A) maximum dividend method
B) pseudo dividend method
C) sustainable growth method
D) dividend payout method

Question

Quizplus · Accepted Answer

The pseudo dividend method involves adjusting working capital to remove surplus cash and does not explicitly forecast dividends, making it suitable for valuing companies that do not pay dividends.

The Equity Valuation Method Involving Zero Explicitly Forecasted Dividends and an Adjustment