Why can free cash flow be regarded as a dividend

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Reference no: EM133344869

Questions: Suggest your explanation (or opinion) for each of the question provided below:

  • Why can free cash flow (FCF) be regarded as a dividend, that is, a distribution of value rather than the value created?
  • A firm has positive free cash flow and a (positive) net dividend to shareholders that is less than free cash flow. What must the firm do with the excess of the free cash flow over the (net) dividend?
  • Explain why profitable company sometimes have (report) negative cash flows?

 

Reference no: EM133344869

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