Which of the following statements about the FCF valuation model are true? Check all that apply. The model can be applied to companies that either pay or do not pay a dividend—but it cannot be applied to privately-held companies. The FCF valuation model recognizes that a firm’s value is a function of its risk—including its use of debt and equity financing and the markets in which it operates. A company’s FCFs are a function of how effectively managers control the firm’s costs, manage its operating and nonoperating assets, and generate sales revenues. The model is useful because it demonstrates the relationship between quality of the decisions that managers make and the value of their company.