Suppose that you are valuing a younger, start up company with really rapid growth using the FCFF method. When you are doing your valuation, you find that G>ROC for the first two years of your valuation. Which of the following statement is true regarding the first two years of your valuation? I. The retention ratio for the company will be greater than 1. II. The FCFF for the company will be negative. III. You should change the retention ratio is those two years so that they are less than 1.

I, II and III

I and II only

I only

II only