answer to q13.c said that “FCFE model explicilty recognizes the company’s investment and financing policies as well as its dividend policy”. I don’t really get how FCFE recognize copmany’s dividend policy… any advice/ Thanks.
Well suppose FCFE = Dividends, if the firm pays all its FCFE as dividends, so it gives you an idea of what % of FCFE they are holding on too, and that to which they are returning to shareholders