Free cash flows are:
A) liquid financial assets for which investments in current businesses are no longer economically viable.
B) liquid financial assets that for tax purposes must be reinvested in the firm if not distributed as dividends to shareholders.
C) the profits resulting after a restructured firm has been sold.
D) dividends distributed to shareholders that are taxed as capital gains.

Question

Quizplus · Accepted Answer

Free cash flows refer to the cash generated by a company that is available for distribution to its investors after accounting for capital expenditures and working capital needs. They are not necessarily liquid financial assets but represent the cash available for investment in new projects, paying dividends, or reducing debt.

Free Cash Flows Are