help please

7) The sustainable growth rate is a function of the return on equity and the earnings retention rate.

The sustainable growth rate is a function of the return on equity and the earnings retention rate.

True

False

4) If free cash flows are expected to be negative for an extended forecast, the analyst may have more confidence using a residual income valuation instead.

If free cash flows are expected to be negative for an extended forecast, the analyst may have more confidence using a residual income valuation instead.

True

False

In Example 2 (from Chapter 7) Coca-Cola. be valued adequately with a dividend discount model (DOM) because the dividends paid and the earnings per share have a very relationhip. If dividends do not bear an understandable relation to value creation in the comparn, applying the DOM to value the stock is likely to be In a situation like this, discounting might be a better method for valuation