1. Which of the below is TRUE?
a. An increase in borrowings will decrease cash flow to stockholders
b. A decrease in borrowings will increase cash flow to creditors
c. Issuing new stock will increase cash flow to stockholders
d. An increase in dividends paid will decrease cash flow to stockholders
2. Net income + depreciation - income tax expense = cash flow from assets
a. true
b. false
3. Another name for 'cash flow from assets' is 'free cash flow'
a. true
b. false
4. A firm's net income can be substituted for that firm's free cash flow in calculating the firm's market value with little impact on the outcome.
a. true
b. false