Free cash flow is defined as
A) cash flows available for payments to stockholders of a firm after the firm has made payments to all others with claims against it.
B) cash flows available for payments to stockholders and debt holders of a firm after the firm has made payments necessary to vendors.
C) cash flows available for payments to stockholders and debt holders of a firm after the firm has made investments in assets necessary to sustain the ongoing operations of the firm.
D) cash flows available for payments to stockholders and debt holders of a firm that would be tax-free to the recipients.

Question

Quizplus · Accepted Answer

Free cash flow is the cash that a company generates after accounting for cash outflows to support operations and maintain its capital assets. It is available for payments to both stockholders and debt holders after these operational and investment activities.

Free Cash Flow Is Defined as