- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Valuation
- Learning Module 21. Discounted Dividend Valuation
- Subject 1. Streams of Expected Cash Flows
CFA Practice Question
The application of ______ depends on the quality of accounting disclosure and the degree of distortion.
B. Free cash flow model.
C. Residual income model.
A. Dividend discount model.
B. Free cash flow model.
C. Residual income model.
Correct Answer: C
User Contributed Comments 2
| User | Comment |
|---|---|
| ostrich | Tricky! |
| MonkeySee | Not Really, ostrich: A) Discounts are fixed payments, especially past ones B) Cash flow statments are difficult to manipulate C) Net Income is based on many accounting assumptions! |