Chartered Financial Analyst Level 1

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Explanation:

Option A (Incorrect): A free-cash-flow-to-equity (FCFE) model is not a multiplier model. Multiplier models primarily rely on share price multiples or enterprise value multiples, whereas FCFE models are based on discounted cash flows.
Option B (Correct): The FCFE model is a type of present value model, as it involves discounting future cash flows to equity holders to estimate the intrinsic value of a stock.
Option C (Incorrect): The FCFE model is not an asset-based valuation model. Asset-based models estimate intrinsic value by subtracting liabilities and preferred shares from the estimated value of a corporation's assets, which differs from the cash flow approach used in FCFE models.

Explanation:

Option A (Incorrect): A free-cash-flow-to-equity (FCFE) model is not a multiplier model. Multiplier models primarily rely on share price multiples or enterprise value multiples, whereas FCFE models are based on discounted cash flows.
Option B (Correct): The FCFE model is a type of present value model, as it involves discounting future cash flows to equity holders to estimate the intrinsic value of a stock.
Option C (Incorrect): The FCFE model is not an asset-based valuation model. Asset-based models estimate intrinsic value by subtracting liabilities and preferred shares from the estimated value of a corporation's assets, which differs from the cash flow approach used in FCFE models.

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Multiplier model.

37.5%

Present value model.

50.0%

Asset-based valuation model.

12.5%