The answer is True.
The statement is correct that many companies use free cash flow to estimate the amount of cash that would be available for unexpected opportunities.
True or False? Many companies use free cash flow to estimate the amount of cash that...
What is free cash flow?
What is free cash flow? It is "free" money, which means it is available at a 0% interest rate. It is the amount of cash that a business could be expected to generate from its normal operations Free Cash Flow is another name for Net Income. It is the total amount of money being transferred into and out of a business.
Which of the following statements is not true, when describing the concept of free cash-flow? "Free cash-flow is the cash that is available after... a. Paying variable costs b. Paying fixed costs c. Paying taxes d. Investing in corporate projects e. Paying a dividend to stock holders
Charges are free to flow in an open circuit. True or False
to be in the exit stage, a venture must have positive free cash flow. A. True B. False C. Uncertain
True or False: Companies prefer that their working capital is a positive amount rather than a negative amount. Select one: O True False
Use the corporate, or free cash flow, model to estimate Petry Corporation's intrinsic value. The firm's WACC is 10.00%, its end-of-year free cash flow (FCF1) is expected to be $65.0 million, the FCFs are expected to grow at a constant rate of 5.00% a year in the future, the company has $200 million of long-term debt and preferred stock, and it has 25 million shares of common stock outstanding. Assume the firm has zero non-operating assets. What is the firm's...
Which of the following statements is CORRECT? a. The current cash flow from existing assets is highly relevant to investors. However, since the value of the firm depends primarily upon its growth opportunities, accounting net income projections from those opportunities are the only relevant future flows with which investors are concerned. b. Interest paid by a corporation is a tax deduction for the paying corporation, but dividends paid are not deductible. This treatment, other things held constant, tends to discourage...
4. The cost of retained earnings True or False: It is free for a company to raise money through retained earnings, because retained earnings represent money that is left over after dividends are paid out to shareholders. False O True The cost of equity using the CAPM approach The current risk-free rate of return (rRF) is 4.67% while the market risk premium is 6.17%. The D'Amico Company has a beta of 0.92. Using the capital asset pricing model (CAPM) approach,...
Make-to-order companies use inventory whereas make-to-stock companies use backorders to shift demand. True or False
Make-to-order companies use inventory whereas make-to-stock companies use backorders to shift demand. True or False