Cash flows available to pay the firm's stockholders and debt holders after the firm has made the necessary working capital investments, fixed asset investments, and developed the necessary new products to sustain the firm's ongoing operations is referred to as _________________.

Question

Quizplus · Accepted Answer

Free cash flow is the cash flow available to the firm's stockholders and debt holders after the firm has made the necessary investments in working capital, fixed assets, and new products to sustain the ongoing operations. It is calculated as operating cash flow minus capital expenditures and changes in net operating working capital.

Cash Flows Available to Pay the Firm's Stockholders and Debt