The cash flow of the firm must be equal to:
A)cash flow to equity plus cash flow to debtholders.
B)cash flow to debtholders minus cash flow to equity.
C)cash flow to governments plus cash flow to equity.
D)cash flow to equity minus cash flow to debtholders.
E)None of the above.

Question

Quizplus · Accepted Answer

The cash flow of the firm is distributed between equity holders and debtholders, so it equals the cash flow to equity plus cash flow to debtholders.

The Cash Flow of the Firm Must Be Equal To