QUESTIONS 79 THROUGH 90 RELATE TO EQUITY INVESTMENTS

87. The best description of the measure of cash flow to use when estimating the total

value of a firm is the operating free cash flow:

A. prior to interest payments on debt.

B. prior to interest payments on debt but after deducting funds needed for capital

expenditures.

C. after adjustment for payments to debt holders, but before dividend payments

to common stockholders.