How can a firm pay a dividend with zero free cash flow

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Question: 1. Why can free cash flow be regarded as a dividend, that is, as a distribution of value rather than the value created?

2. A firm has positive free cash flow and a net dividend to shareholders that is less than free cash flow. What must it do with the excess of the free cash flow over the dividend?

3. How can a firm pay a dividend with zero free cash flow?

Reference no: EM131490688

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