单选题

Which of the following is the most appropriate reason for using a free-cash-flow-to-equity (FCFE) model to value equity of a company?

A、 FCFE is a measure of the firm’s dividend paying capacity.
B、 FCFE models provide more accurate valuations than the dividend discount models.
C、 A firm’s borrowing activities could influence dividend decisions but they would not impact FCFE.

【正确答案】 A

【答案解析】

A is correct. FCFE is a measure of the firm’s dividend paying capacity.