📈 CFA Exam Prep

Free cash flow to the firm (FCFF) represents:

A Net income only
B Cash available to all capital providers (debt and equity holders) after operating and capital expenditures
C Revenue
D Only dividends

✓ Correct Answer: Option B

FCFF = EBIT(1−t) + Depreciation − CapEx − ΔWorking Capital. It represents cash available to all investors.

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