A Firm's Capital Structure Does Not Affect Its Calculated Free

question 9

True/False

A firm's capital structure does not affect its calculated free cash flows, because FCF reflects only operating cash flows.

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Definitions:

Discretionary Income

What remains of someone's earnings for savings, investment, or other expenses after settling tax obligations and necessary personal expenses like shelter and food.

Property Taxes

Taxes levied by local government on real property (land and buildings), based on assessed value, to fund municipal services like schools, roads, and public works.

Cost of Living

A measure of the average cost necessary to cover basic expenses such as housing, food, taxes, and healthcare in a certain place and time.

Consumer Expenditure Survey

A statistical survey that collects information on the spending habits, income, and demographic characteristics of consumers.