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 will 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 generated by a company that is available to be distributed to its creditors and investors after the company has made the necessary investments to sustain its ongoing operations. This includes investments in capital expenditures, such as equipment and other assets necessary to maintain the business. Free cash flow is a crucial metric in determining a company's financial flexibility and may be used to finance growth opportunities, pay dividends, or reduce debt.

Free Cash Flow Is Defined As