About the free cash flow, Free cash flow. Stock repurchases

About the free cash flow

Assignment Help Financial Management

Reference no: EM132044483

1. Which of these statements is correct? Free cash flow

A) is another term for retained earnings.

B) is positive if the company is issuing debt or stock.

C) is available to be paid out to investors as interest or dividends, or to repay debt or buy back stock.

D) is equal to net income.

2. Which statement is correct ?

A) Stock repurchases increase the number of shares and make it difficult to forecast dividends per share

B) Stock repurchases do not add value to a business and can be ignored.

C) Stock repurchases invalidate the dividend discount model

D) When there are repurchases, it is simpler to value a business by discounting the free cash flow.

Reference no: EM132044483

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