MEASURING VALUE-RELEVANT FREE CASH FLOWS. The chapter describes free cash flows for common equity shareholders. If the firm borrows cash by issuing debt, how does that transaction affect free cash flows for common equity shareholders in that period? If the firm uses cash to repay debt, how does that transaction affect free cash flows for common equity shareholders in that period?
Text Book: Financial Reporting, Financial Statement Analysis and Valuation: A Strategic Perspective By James Wahlen, Stephen Baginski, Mark Bradshaw.