Which of the following is true regarding the traditional discounted cash flow approach?
A. The discount rate is adjusted to accommodate the riskiness of the cash flows.
B. The cash flows have been adjustment to accommodate their riskiness.
C. This model is best used where cash flows are fairly uncertain.
D. Both a) and c) are correct.
Answer:A
Which of the following is true regarding the traditional discounted cash flow approach?
A. The discount rate is adjusted to accommodate the riskiness of the cash flows. B. The cash flows have been adjustment to accommodate their riskiness. C. This model is best used where cash flows are fairly uncertain. D. Both a) and c) are correct.