Questions: Which of the following statements is false regarding the business valuation process? Multiple Choice Firms that earn less than the cost of equity capital produce negative abnormal earnings and generally have a share price below book value. Income or loss from discontinued operations is considered a transitory component of a firm's earnings. Forecasting future cash flows requires calculations using factors from future value tables. A component of earnings that is unrelated to future free cash flows or future earnings and is not pertinent to assessing current share price is considered a noise component.

The answer is: Forecasting future cash flows requires calculations using factors from future value tables.

This statement is true. When a firm's return on equity is less than its cost of equity, it generates negative abnormal earnings, which often results in a share price that is below its book value.

This statement is true. Discontinued operations are considered transitory because they are not expected to recur in the future and are thus separated from continuing operations in financial statements.

This statement is false. Forecasting future cash flows typically involves discounting future cash flows to their present value using discount rates, rather than using future value tables. Future value tables are used to calculate the future value of a present amount, which is not the same as forecasting future cash flows.

This statement is true. Noise components are parts of earnings that do not provide useful information for predicting future performance or assessing the current value of the firm.