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true or false: if the firm has no debt and therefore does not incur any interest expense, then the net income of the firm is equivelent to the cashflow of the firm.
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29 votes
29 votes
true or false: if the firm has no debt and therefore does not incur any interest expense, then the net income of the firm is equivelent to the cashflow of the firm.

User Yini
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1 Answer

7 votes
7 votes

Answer:

True

Step-by-step explanation:

If the firm has no debt , then the firm's net income equals the Free cashflow to equity (assuming no capital expenditure, networking capital change, depreciation etc) , In case of an all equity firm , the Free cashflow to equity is the same as Free Cashflow of the firm. So, the statement is TRUE

User Rodrigo Gama
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