Which of the Following Statements Is False

Which of the following statements is false?

A) Many managers make the mistake of focusing on accounting earnings as opposed to free cash flows.
B) Given accurate information about any two of these variables (a firm's future cash flows, its cost of capital, and its share price) a valuation model allows us to make inferences about the third variable.
C) A valuation model will tell us the most about the variable for which our prior information is the least reliable.
D) The idea that investors are able to identify positive NPV trading opportunities is referred to as the efficient markets hypothesis.

Correct Answer:

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