Asked by Blake cannistraro on Apr 29, 2024
Verified
The amount available to finance planned expansion of operating capacity,reduce debt,pay dividends,or repurchase stock is distributable (or free)cash flow.
Distributable Cash Flow
A measure of the cash available for distribution to shareholders, often used in assessing the health of a company or a fund.
Operating Capacity
The maximum output a company can produce using its current resources, without compromising quality or efficiency.
- Recognize the significance of free cash flow in valuation and investment decision-making.
Verified Answer
ZK
Zybrea KnightMay 05, 2024
Final Answer :
True
Explanation :
The statement accurately defines distributable (or free) cash flow as the amount of cash available after accounting for necessary capital expenditures to support existing operations. This excess cash can be used to finance growth, reduce debt, pay dividends, or repurchase stock.
Learning Objectives
- Recognize the significance of free cash flow in valuation and investment decision-making.
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