A firm's free cash flow (FCF) represents the amount of cash flow available to investors (stockholders and bondholders) after the firm has met all operating needs and after having paid for net fixed asset investments and net current asset investments.

Question

Quizplus · Accepted Answer

This is the correct definition of free cash flow. It is the cash flow available for distribution to investors after all necessary expenses and investments have been made by the company.

A Firm's Free Cash Flow (FCF) Represents the Amount of Cash