For firms that do not pay dividends, the free cash flow model may be more suitable than the dividend discount model.

Name: For firms that do not pay dividends, the free cash flow model may be more suitable than the dividend discount model.
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The free cash flow model is more suitable for firms that do not pay dividends because it focuses on the cash flows available to the firm, rather than dividends paid to shareholders, providing a more accurate valuation for such companies.

For Firms That Do Not Pay Dividends, the Free Cash