E7.2. Applying the Treasurer's Rule (Medium)

a. Afinn generated freecash flow of $2,348 million andpaid net interest of $23million after tax. It paid a dividend of $14 million and issuedshares for $54 million. There wereno sharerepurchases. Whatdid the treasurer do withthe remaining cashflow and forhowmuch?

b. Afinngenerated a negative freecash flow 0[$1,857million, butthe boardof directors, understanding that the:firm wasquite profitable, maintained the dividend ofS1.25 per share on the 840 million shares outstanding. The firm also paid $32 million in net interest (aftertax).Whatare the responses opento the treasurer?