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BlackZzzverrR [31]
3 years ago
15

Management can make any form of distribution to the firm’s shareholders using the company’s free cash flow (FCF). The underlying

objective is to maximize shareholder wealth by increasing the firm’s value. Any use of FCF that negatively affects the firm’s value is not considered a good use of the FCF.
Which of the following uses is considered to be a good use of free cash flow?

1.Invest in nonoperating assets
2.Invest in operating assets
3.Theoretically, there are some traditional ways of using FCF. If a company uses all of its FCF to pay off all of its debt, it would reap the maximum benefit from the tax-deductible component of interest payments toward the debt.
4.This statement is false because if the firm uses its FCF to pay off all of its debt, it would have and no deductible.
Business
1 answer:
vovikov84 [41]3 years ago
3 0

Answer:

A good use of free cash flow is to Invest in nonoperating assets

Explanation:

Free cash flow (FCF) is a measure of how much cash a business generates after accounting for capital expenditures such as buildings or equipment. This cash can be used for expansion, dividends, reducing debt, or other purposes.

If the underlying objective is to maximize shareholder wealth by increasing the firm’s value. Any use of FCF that negatively affects the firm’s value is not considered a good use of the FCF.

A good use of FCF would be to invest in nonoperating assets such as marketable securities, investments in other companies, etc.)

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Stock may be described as:_________
nydimaria [60]

Answer:

a. an ownership interest in the corporation.

Explanation:

Stock refers to the stake of the owners of a corporation in the company.

It is sometimes referred to as shares or owner's equity and the owners of stock are called shareholders.

Stock therefore may be described as an ownership interest in the corporation represented as equity in the financial statement.

Option a is right.

5 0
3 years ago
10. Uneven cash flows A series of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and variabl
GaryK [48]

Answer:

$1,155,478

Explanation:

Present value is the sum of discounted cash flows

Present value can be found using a financial calculator

Cash flow in year 1 = $100,000

Cash flow in year 2 =  $20,000

Cash flow in year 3 = $480,000

Cash flow in year 4 = $450,000

Cash flow in year 5 = $550,000

I = 9%

Present value = $1,155,478

To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

5 0
3 years ago
Which of the following government offices help individuals fund their college education?
Doss [256]
D. office of student federal aid
7 0
3 years ago
Financial statements are influenced by five important forces that determine a company's competitive intensity: (A) industry comp
Ivan

<u>Full question:</u>

Financial statements are influenced by five important forces that determine a company's competitive intensity: (A) industry competition, (B) buyer power, (C) supplier power, (D) product substitutes, and (E) threat of entry.

Select one:

True

False

<u>Answer:</u>

Financial statements are influenced by five important forces that determine a company's competitive intensity - True

<u>Explanation:</u>

Michael Porter’s five forces of rival(s) can be applied to monitor and investigate the competitive edifice of an industry by attending 5 forces of opposition that impact and form profit potential.   Supplier power. An evaluation of how simple it is for suppliers to force up prices.  Buyer power. An estimation of how accessible it is for buyers to push prices dropping.

Competitive rivalry. The principal driver is the quantity and ability of competitors in the market.  The threat of substitution. Where close alternate goods endure in a market, it improves the likelihood of customers shifting to alternatives.  The threat of new entry. Favorable markets bring new entrants, which decays profitability.

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What happens during the exit stage of a company?
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<span>The Exit stage is when the entrepreneur gets out of the day-to- day commitment of running the company.</span>
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