Explain why a) an increase in free cash flow may also increase the agency cost of equity;

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Explain why a) an increase in free cash flow may also increase the agency cost of equity; and b) an increase in dividends or debt may be effective in making sure free cash flow are used in the best interest of the shareholders.

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Intermediate Financial Management

ISBN: 9780357516669

14th Edition

Authors: Eugene F Brigham, Phillip R Daves

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Posted Date: Apr 03, 2024 09:12 PM

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Explain why a) an increase in free cash flow may also increase the agency cost of equity;

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Free Cash Flow Agency Costs and Shareholder Interests Free cash flow FCF can be a doubleedged sword for shareholders While a healthy level of FCF is d... View the full answer

Intermediate Financial Management

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