Question: What does it mean when a companys free cash flow is negative in one or more years? Do negative values of free cash flow in
What does it mean when a companys free cash flow is negative in one or more years? Do negative values of free cash flow in any way alter or invalidate the notion that a companys fair market value equals the present value of its free cash flows discounted at the companys weighted-average cost of capital? Suppose a companys free cash flows were expected to be negative in all future periods. Can you conceive of any reasons for buying the companys stock?
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