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:

Useful Life

The expected period of time during which an asset remains useful for the purposes for which it was acquired.

Payback Period

The amount of time it takes for an investment to generate an amount of income or cash equivalent to the cost of the investment itself.

Discount Rate

The discount rate is the interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Net Cash Inflows

The total cash receipts minus cash payments over a period of time from operational, financial, and investing activities.