5. Which of the following is true? a. Interest and dividend payments made by a c

Question

5. Which of the following is true? a. Interest and dividend payments made by a corporation are both tax deductible by the paying corporation. b. In general, a firm should expect to earn a high return on investments that have low risk. c. The equity multiplier is an indicator of how efficiently a firm uses its assets. d. Free cash flow represents cash that is available for distribution to the investors of the firm. e. Profit maximization is considered to be a more appropriate goal than shareholder wealth maximization because it considers the timing of the expected returns of the firm.

Explanation / Answer

d. Free cash flow represents cash that is available for distribution to the investors of the firm

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