Most Analysts Prefer Using Price to Free Cash Flow Rather

question 1

Multiple Choice

Most analysts prefer using price to free cash flow rather than price-to-earnings (P/E) ratio because price to free cash flow is ____.

• A) easier to compute
• B) more accurate than cash flow per share
• C) a stricter measure that reduces the cash flow by the amount of capital expenditures
• D) more reliable as a measure of performance

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.