Question 20 Read the below article excerpt for context, or skip to the question if you're already familiar Not yet saved with it. Marked out of 3.00 In his 15 August 2022 article 'Why Atlassian is one of the world's most overvalued businesses', Adam Schwab outlined that "Atlassian pays a huge amount of equity-based compensation to employees". This expense is deducted in Atlassian's profit and loss (P\&L) statement. However, on the cash flow statement, the 30 June 2022 quarter's (Q4'22) US\$163.891 milion 'Share-based payment expense' is added back to 'Net cash provided by operating activities'. Note that practitioners commonly calculate operating free cash flow (OFCF) by adding up the net cash provided by operating activities (usually positive) and purchases of noncurrent assets (CapEx, usually negative) inside the investing activities on the cash flow statement (perhaps adding back InterestExpense*(1-tc) too if it wasn't already). Schwabb quotes the Atlassian founders' Mike Cannon-Brookes and Scott Farquhar in their letter to shareholders: "We capped off FY22 with strong free cash flow results, even as we continue to invest against the sizable market opportunities in front of us. Free cash flow for Q4'22 totalled US\$194.697 million, representing a 26% free cash flow margin [=OFCF / Sales =194,697/759,841]. Our strong financial position provides us with the flexibility to invest purposefully and create value for our customers." Shwabb complains that "ignoring wages in any sort of performance metric [such as free cash flow margin] is completely misleading". Which of the below statements is NOT correct? Share-based payment: Select one: a. Expense is a non-cash expense that needs to be added somewhere in the cash flow statement given that it's an accrual that's subtracted in the P\&L. b. To employees is costly to other shareholders since it increases the number of shares in the company, diluting their ownership proportion. c. Works similarly to an equity raising, but instead of the company being paid in cash for selling the new shares, the company is paid in the employees' time spent working hard. d. Expense should affect OFCF. If it did, the Atlassian founders could have said: "free cash flow for Q4'22 totalled US\$358.588 million (=194.697+163.891), representing a 47% (=358.588/759.841) free cash flow margin