1. Free Cash Flow to the Firm is the cash flow available for distribution to shareholders.

True

False

2. The "Net CAPX" term in FCFE and FCFF is the necessary capital spending required for the firm to be competitive net of accumulated depreciation.

True

False

3. The WACC reflects the required returns to shareholders and creditors.

True

False

4. Free Cash Flow to the Firm (FCFF) is the cash flow available for distribution to the contributors of capital.

True

False

5. To get the fundamental value of stock, FCFE should be discounted at the WACC.

True

False

6. A decrease in accounts payable reflects a source of cash.

True

False

7. Firms can maximize the fundamental value of their equity by eliminating all capital expenditures.

True

False

8. We can get OCF from the statement of cash flows.

True

False

9. An increase in inventory reflects a use of cash.

True

False

10. It makes logical sense to calculate Ve = FCFEo*(1+g)/(ke-g) for all firms.

True

False