Several methods can be used to compute the intrinsic value of a share of a company's common stock. One method uses the free cash flow (FCF) valuation model, while the another method uses the dividend discount model. The FCF valuation model computes a firm's intrinsic value-also called its entity value of its operating activities (Vop) and the value of firm's nonoperating assets value-as the sum of the where: From a manager's perspective, an important difference between a firm's operating assets and its nonoperating assets is that its assets are more strongly influenced by market forces, including interest rates, than by managers' decisions and actions. The company's intrinsic value can be computed and expressed for the organization as a whole, for a component of the company, or on a per-share basis. The per-share intrinsic value of the firm's equity is calculated by dividing the intrinsic value of the equity by the number of Which of the following statements about the FCF valuation model are true? The FCF valuation model reflects the firm's riskiness-as it affects the company's intrinsic value-via the WACC variable. The model can be applied to companies that either pay or do not pay a dividend--but it cannot be applied to privately-held companies. The model is useful because it examines the relationship between a company's risk, operating profitability, and value of the firm's operations. A company's FCFs are a function of (1) how quickly the company grows its sales and assets, (2) managers control the firm's costs, and (3) choose to finance the company's activities