In contrast to managers' desires, shareholders usually prefer that free cash flows be:

Question

Quizplus · Accepted Answer

Shareholders generally prefer to receive a return on their investment in the form of dividends rather than seeing the company diversify or acquire more assets. This is because dividends are a way for shareholders to receive current income and provide a signal that the company is financially stable and profitable. Shareholders may also use dividends to reinvest in the company or in other investments, depending on their investment strategy.

In Contrast to Managers' Desires, Shareholders Usually Prefer That Free