Question: The Free Cash Flow to Equity valuation method differs from the Corporate Valuation method because: a . Free Cash Flow to Equity method discounts present
The Free Cash Flow to Equity valuation method differs from the Corporate Valuation method because:
a
Free Cash Flow to Equity method discounts present value of dividends rather than Free Cash Flows to the Firm
b
Free Cash Flow to Equity method uses a discount rate which is lower that the WACC used in the Corporate Valuation model
c
Free Cash Flow to Equity method provides an estimate of the value of equity rather than value of operations.
d
Free Cash Flow to Equity Method is more accurate
e
Free Cash Flow to Equity Method estimates value of business and financing cash flows separately.
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