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Strategies & Market Trends : Free Cash Flow as Value Criterion
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To: Andrew who wrote (202)11/12/1997 7:47:00 AM
From: Reginald Middleton   of 253
 
<And I would indeed say, for a given future rate of growth, the more FCF you have, the better. Or if you want to throw WACC and risk into the mix, why not "All else being equal, the more FCF the better".>

If you increase FCF while at the same time increasing your WACC at a greater rate, your are destroying value for your shareholders. That is why you must look at both the risk and the reward sides of the equation to obtain an accurate answer.
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