A Firm's Capital Structure Does Not Affect Its Free Cash

question 58

True/False

A firm's capital structure does not affect its free cash flows as discussed in the text,because FCF reflects only operating cash flows,which are available to service debt,to pay dividends to stockholders,and for other purposes.

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Definitions:

Balance of Trade

The difference between the value of a country's exports and imports over a certain period.

Balance of Payments

A statement that summarizes an economy’s transactions with the rest of the world for a specified time period, including trade, financial, and capital transactions.

Trade Surplus

A scenario where the value of goods a country sells abroad is higher than what it buys, reflecting a surplus in the trade balance.

Favorable Balance

A financial situation where the credits or revenues are greater than debits or expenses, leading to a net positive outcome.