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A firm generated free cash flow of $2,448 million and paid net interest of $23 million after tax. It paid a dividend of $14 million and issued shares for $54 million. There were no share repurchases. What is the remaining cash flow? A. $2,265 million B. $2,365 million C. $2,465 million D. $2,565 million

Question

A firm generated free cash flow of 2,448millionandpaidnetinterestof2,448 million and paid net interest of 23 million after tax. It paid a dividend of 14millionandissuedsharesfor14 million and issued shares for 54 million. There were no share repurchases. What is the remaining cash flow? A. 2,265millionB.2,265 million B. 2,365 million C. 2,465millionD.2,465 million D. 2,565 million

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Solution

To calculate the remaining cash flow, we need to follow these steps:

  1. Start with the free cash flow, which is $2,448 million.
  2. Subtract the net interest paid after tax, which is 23million.Thisgivesus23 million. This gives us 2,448 million - 23million=23 million = 2,425 million.
  3. Subtract the dividend paid, which is 14million.Thisgivesus14 million. This gives us 2,425 million - 14million=14 million = 2,411 million.
  4. Add the cash received from issuing shares, which is 54million.Thisgivesus54 million. This gives us 2,411 million + 54million=54 million = 2,465 million.

So, the remaining cash flow is 2,465million.ThecorrectanswerisC.2,465 million. The correct answer is C. 2,465 million.

This problem has been solved

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