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:

Olfact/o

A prefix in medical terminology related to the sense of smell.

Combining Form

A form of a word that only occurs prefixed to another word, altering the meaning of the word it is attached to.

Smell

The sense by which individuals perceive odors, a process facilitated by the olfactory system in the nose.

Gluc/o

A word root used in the medical field to refer to sugar, particularly glucose, which is a primary source of energy for the body's cells.