Free cash flow rather than price-to-earnings ratio

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Most analysts prefer using price to free cash flow rather than price-to-earnings (P/E) ratio because price to free cash flow is:

a. Easier to compute.

b. More accurate than cash flow per share.

c. A stricter measure that reduces the cash flow by the amount of capital expenditures.

d. More reliable as a measure of performance.

Reference no: EM13825808

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