Which of the following statements is FALSE?

A.

When using the discounted free cash flow model, we should use the firm's equity cost of capital.

B.

We interpret rwacc as the expected return the firm must pay to investors to compensate them for the risk of holding the firm's debt and equity together.

C.

The firm's weighted average cost of capital (WACC) denoted rwacc is the cost of capital that reflects the risk of the overall business, which is the combined risk of the firm's equity and debt.

D.Intuitively, the difference between the discounted free cash flow model and the dividenddiscount model is that in the dividenddiscount model the firm's cash and debt are included indirectly through the effect of interest income and expenses on earnings in the dividenddiscount model.