Coastal Pipeline, Inc., anticipated cash flow from operating activities of $8 million in 2010. It will need

Question:

Coastal Pipeline, Inc., anticipated cash flow from operating activities of $8 million in 2010. It will need to spend $1.5 million on capital investments in order to remain competitive within the industry. Common stock dividends are projected at $.6 million and preferred stock dividends at $.25 million.

a. What is the firm's projected free cash flow for the year 2010?

b. What does the concept of free cash flow represent?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Free Cash Flow
Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the...