Equity Investments Q228
0. Which of the following statements is incorrect about FCFE model?
- A
FCFE is a measure of a firm’s expected dividends.
- B
It can also be used for a non-dividend paying stock unlike DDM which requires the timing and the amount of the first dividend to be paid.
- C
Not all of the available cash flow is distributed to shareholders because a company retains some part of it for future investments as a going concern.
- Option : A
- Explanation : FCFE is a measure of a firm’s dividend-paying capacity rather than expected dividends.
