Question #10
Reading: Reading 21 Free Cash Flow Valuation
PDF File: Reading 21 Free Cash Flow Valuation.pdf
Page: 5
Status: Correct
Correct Answer: A
Question
Free cash flow to the firm is equal to cash flow from operations minus fixed capital investment:
Answer Choices:
A. minus after-tax interest expense
B. plus after-tax interest expense
C. minus pre-tax interest expense
Explanation
Free cash flow to the firm is equal to cash flow from operations minus fixed capital
investment plus after-tax interest expense.