Since the Free Cash Flow of a Firm Technically Belongs

question 64

True/False

Since the free cash flow of a firm technically belongs to the company's owners or its shareholders, in order for diversification to create value, a company's future ROIC must be less than the value shareholders would reap by returning the cash to them.

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Definitions:

Internal Iliac Vein

A vein located in the pelvis that drains blood from the lower abdomen and pelvis into the common iliac veins.

Hepatic Portal Vein

A blood vessel that carries nutrient-rich blood from the gastrointestinal tract and spleen to the liver.

Postcava

Also known as the inferior vena cava, it's a large vein that carries deoxygenated blood from the lower half of the body into the heart.

Cephalic Vein

A large vein that runs along the outer side of the arm from the hand to the shoulder, often used for intravenous injections or blood sampling.