The Free Cash Flow Hypothesis Supports

question 22

Multiple Choice

The free cash flow hypothesis supports

• A)decreasing stockholder dividends to retain more cash within the firm.
• B)reducing a firm's level of debt to reduce the amount of cash used to pay interest.
• C)increasing the debt portion of a firm's capital structure to increase firm value.
• D)hiring managers with little or no stock ownership in the firm.
• E)the idea that firms with high levels of free cash flow are more apt to make good acquisitions than firms with low levels.

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