Question #1
Reading: Reading 21 Free Cash Flow Valuation
PDF File: Reading 21 Free Cash Flow Valuation.pdf
Page: 1
Status: Incorrect
Correct Answer: B
Your Answer: B
Question
Free cash flow approaches are the best source of value when:
Answer Choices:
A. return on assets is falling
B. dividends are not paid
C. a firm has significant minority interest
Explanation
Free cash flow approaches are best when dividends are not paid. Both remaining
responses have nothing to do with the decision.