Which of the Following Statements Is FALSE

question 44

Multiple Choice

Which of the following statements is FALSE?

• A) The more cash a firm uses to repurchase shares, the less it has available to pay dividends.
• B) Free cash flow measures the cash generated by a 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 of a firm as the net cost of acquiring the firm's equity, taking its cash, and paying off all debts.

---

Definitions:

Production Function

An equation that specifies the output that a firm can produce with varying combinations of inputs or factors of production.

Cartoonists' Labor

The work performed by individuals skilled in creating cartoons, whether for animation, comics, or other media forms.

Cheapest Way

This refers to the method or strategy that incurs the lowest cost to achieve a particular outcome or objective.

Short-Run Total Cost

The total of all costs incurred in the production of goods or services in the short term, including both fixed and variable costs.