In Contrast to Managers' Desires, Shareholders Usually Prefer That Free

question 100

Multiple Choice

In contrast to managers' desires, shareholders usually prefer that free cash flows be:

• A) used to diversify the firm.
• B) returned to them as dividends.
• C) used to reduce corporate debt.
• D) re-invested in additional corporate assets.

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Definitions:

Concentration Ratio

A measure used in economics to assess the degree of market concentration, often indicating the combined market share of the top firms in an industry.

Herfindahl-Hirschman Index

A measure of market concentration to evaluate the level of competition within an industry.

Herfindahl-Hirschman Index

A measure used to determine the level of competition within an industry, calculated by summing the squares of the market shares for each firm within the industry.

Concentration Ratio

A measure used in economics to assess the degree of market concentration by calculating the market share of the largest firms within an industry.