The free cash flow to equity (FCFE) approach uses only the portion of the cash flows that are available

Question

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The FCFE approach uses only the cash flows that are available for distribution to shareholders. This is because FCFE represents the cash flow that is available to equity shareholders after accounting for any necessary reinvestment in the business. It does not consider the portion of cash flows that are available for distribution to bondholders, as bondholders are debt holders and not equity holders.

The Free Cash Flow to Equity (FCFE) Approach Uses Only