The Free-Cash-Flow Theory of Takeovers Predicts That

question 70

Multiple Choice

The free-cash-flow theory of takeovers predicts that:

• A)Firms without free cash flow will become the most common LBOs.
• B)Firms with free cash flow will continue to be the acquirers.
• C)Firms with excess cash do not have a tendency to use it wisely.
• D)The riskiest takeover candidates are those with large amounts of free cash flow.

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