When valuing a company's real asset cash flows,which cash flows should be considered? The value of a firm is given by its free cash flows discounted by which of the following?

Question

Quizplus · Accepted Answer

When valuing a company's real asset cash flows, only the cash flows from real assets after reinvestment costs should be considered. The value of a firm is given by its free cash flows discounted by cash flows from real assets after reinvestment costs. This is because reinvestment is necessary to maintain and grow the value of the company's real assets, and should be factored in when determining the value of the company.

When Valuing a Company's Real Asset Cash Flows,which Cash Flows