Many financial analysts and investors believe that measures of cash flow are extremely useful when analyzing the financial health and prospects of a company. In recent years, a measure called “free cash flow” has become widely used. However, many different definitions and ways to calculate...

According to recent surveys, most companies use discounted-cash-flow (DCF) methods to evaluate capital budgeting decisions. DCF methods typically assume that a project's initial cash outlay (ICO) is known with certainty. However, many types of initial outlays have substantial uncertainty,...

This paper addresses the relationship between the capital structure and the systematic risk of common equity for a firm whose capital structure includes convertible securities. Adding warrants to the capital structure reduces the systematic risk of equity, which is consistent with the fact that...