- CFA Exams
- CFA Level I Exam
- Study Session 11. Equity Valuation (3)
- Reading 31. Private Company Valuation
- Subject 5. Income approach methods of private company valuation
CFA Practice Question
According to the textbook, ______ method is a theoretically preferred method to value companies that are not expected to grow at a constant rate.
A. free cash flow.
B. capitalized cash flow.
C. excess earnings.
Explanation: FCF valuation using a series of discrete cash flow projections is preferred in this case.
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