Which of the Following Statements Is FALSE

question 35

Multiple Choice

Which of the following statements is FALSE?

• A)The more cash the firm uses to repurchase shares,the less it has available to pay dividends.
• B)Free cash flow measures the cash generated by the firm after payments to debt or equity holders are considered.
• C)We estimate a firm's current enterprise value by computing the present value (PV)of the firm's free cash flow.
• D)We can interpret the enterprise value as the net cost of acquiring the firm's equity,taking its cash,and paying off all debts.

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Definitions:

Electrons

Subatomic particles with a negative charge, found orbiting the nucleus of an atom.

Net Charge

The total electrical charge of an atom or molecule resulting from the gain or loss of electrons.

Gaseous State

One of the four fundamental states of matter, composed of particles that have neither a defined volume nor shape.

Shares Electrons

Refers to the covalent bonding between atoms, where electrons are shared between atoms to achieve a full outer shell and attain chemical stability.