Questions
PMGT2850 (ND) Class Quiz 5
Multiple choice
The Free Cashflow to Equity in a firm is passed on to whom and why? (select all correct answers)
Options
A.Company employees
B.Government, because they are among the first parties to be paid from any money earned by the business
C.Shareholders in the company as the Free Cashflow to Equity is basis for dividend
D.Banks and other debt holders, because they are among the first parties to be paid from any money earned by the business
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Step-by-Step Analysis
Question restatement: The Free Cashflow to Equity (FCFE) in a firm is passed on to whom and why? (select all correct answers)
Option 1: 'Company employees' — This is incorrect. FCFE represents cash available to equity holders after fulfilling obligations to debt holders and reinvestment. It does not go to employees by default; employee compensation is an operating expe......Login to view full explanationLog in for full answers
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