Free cash flows measures ________.
A)the ability of a company to raise money through the sale of stock
B)the amount of cash available to pay dividends
C)the amount of excess cash generated by operating activities
D)a firm's ability to engage in long-term investment opportunities

Question

Quizplus · Accepted Answer

Free cash flows measure a firm's ability to engage in long-term investment opportunities by calculating the amount of cash generated by operating activities that is available for capital expenditures, debt repayment, and other long-term investments. It is not directly related to the ability of a company to raise money through the sale of stock or the amount of cash available to pay dividends.

Free Cash Flows Measures ________