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Two firms are identical except Company A pays higher interest expenses and lower dividends, while Company B pay lower interest charges and higher dividends. This
- Two firms are identical except Company A pays higher interest expenses and lower dividends, while Company B pay lower interest charges and higher dividends. This will result in:
- Company A having both a higher Operating Cash Flow and a higher Financing Cash Flow.
- Company B having both a higher Operating Cash Flow and a higher Financing Cash Flow.
- Company A having a higher Operating Cash Flow and a lower Financing Cash Flow.
- Company B having a higher Operating Cash Flow and a lower Financing Cash Flow.
None of the above are correct.
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