单选题

Which of the following statements is least accurate? A firm's free-cash-flow-to-equity (FCFE):

A、 is a measure of the firm's dividend-paying capacity.
B、 increases with an increase in the firm's net borrowing.
C、 is significantly affected by the amount of dividends paid by the firm.

【正确答案】 C

【答案解析】

C is correct. Dividends, a discretionary cash flow from financing activities, have no bearing on a firm's free-cash-flow-to-equity-as can be seen from the formula furnished below:
FCFE = CFO - FCInv + Net borrowing.