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Question 3: Suggest your explanation (or opinion) for each of the question provided below: a. Why can free cash flow (FCF) be regarded as a
Question 3: Suggest your explanation (or opinion) for each of the question provided below:
a. Why can free cash flow (FCF) be regarded as a dividend, that is, a distribution of value rather than the value created? (9 points)
b. A firm has positive free cash flow and a (positive) net dividend to shareholders that is less than free cash flow. What must the firm do with the excess of the free cash flow over the (net) dividend? (8 points)
c. Explain why profitable company sometimes have (report) negative cash flows? (8 points)
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