Explanation

FCFE (Free Cash Flow to Equity) vs. DDM (Dividend Discount Model):

• Option A is incorrect: FCFE is generally more complex and time-consuming to estimate than DDM because it requires forecasting multiple components of cash flow.

• Option B is correct: FCFE is particularly suitable for valuing companies that do not pay dividends or have unstable dividend policies. Since FCFE represents the cash available to equity holders regardless of whether it's distributed as dividends, it can be used for companies that reinvest most of their earnings.

• Option C is incorrect: While FCFE measures cash flow available to shareholders, dividends represent the actual cash flow going to shareholders. FCFE is the potential cash flow that could be distributed, not necessarily what is actually distributed.