February 23, 2017

Homework Help: Financial Analysis - free cash flows

Posted by Tia on Thursday, March 1, 2007 at 10:17pm.

b. Do negative values of free cash flow in way alter or invalidate the notion that a company's fair market value equals the present value of its free cash flows discounted at the company’s weighted average cost of capital? Suppose a company's free cash flows were expected to be negative in all future periods. Can you conceive of any reasons for buying the company's stock?

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