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Most Analysts Prefer Using Price to Free Cash Flow Rather

Question 54

Multiple Choice

Most analysts prefer using price to free cash flow rather than price-to-earnings (P/E) ratio because price to free cash flow is:


A) Easier to compute.
B) More accurate than cash flow per share.
C) A stricter measure that reduces the cash flow by the amount of capital expenditures.
D) More reliable as a measure of performance.

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