- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Valuation
- Learning Module 22. Free Cash Flow Valuation
- Subject 5. Free cash flow model variations
CFA Practice Question
Three-stage models are particularly useful for valuing companies
B. that are in the growth phase of their industrial life cycle.
C. with complicated capital structures.
A. in a purely competitive market.
B. that are in the growth phase of their industrial life cycle.
C. with complicated capital structures.
Correct Answer: B
These firms will be experiencing high earnings growth rate, which will slow down as they face increasing competition and decline to a stable level.
User Contributed Comments 0
You need to log in first to add your comment.