Question

The "pseudo dividend method" (PDM) is a valuation method involving zero explicitly forecasted dividends and an adjustment to working capital to strip surplus cash.

Answer 1

This question is incomplete, below is the complete one gotten from google:

The "pseudo dividend method" (PDM) is a valuation method involving zero explicitly forecasted dividends and an adjustment to working capital to strip surplus cash. True of False?

Answer:

The "pseudo dividend method" (PDM) is a valuation method involving zero explicitly forecasted dividends and an adjustment to working capital to strip surplus cash - True

Explanation:

With regards to the pseudo dividend method" (PDM) is a valuation method The following happens:

• There is a formally projection of all cash surpluses as paid out as dividends

• Balance sheet will have zero for all surplus cash balances

• Venture’s equity can be valued directly using dividends/issue line in CF Statement (or by equity VCF method)

• There will be no excess cash in end