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From Page 7 0 5 of the text ( Questions , Exercises, Problems and Cases / Section. 1 2 . 2 - Free - Cash

From Page 705 of the text (Questions, Exercises, Problems and Cases / Section. 12.2- Free-Cash-Flows-Based Valuation Approaches): Explain the theory behind the free cash flow valuation approach. Why are the free cash flows value relevant to common equity shareholders when they are not cash flows to those shareholders, but rather are cash flows into the firm?

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