When Calculating Free Cash Flows to Common Equity Shareholders,financing Activities

question 21

Multiple Choice

When calculating free cash flows to common equity shareholders,financing activities do not include:

• A) Debt cash flows
• B) Adjustments for capital expenditures
• C) Adjustments for Preferred stock cash flows
• D) Financial asset cash flows

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Definitions:

Interest Payments

The payments made by a borrower to a lender for the use of borrowed money, typically expressed as an annual percentage of the principal.

Accounting-based Incentives

Incentives designed based on accounting figures and performance metrics to motivate employees or management toward specific behaviors.

Earnings Growth

An increase in a company's net income over a specified period, indicating financial health and profitability.

Shareholder Value

The value delivered to shareholders because of management's ability to grow earnings, dividends, and share price.