Free Cash Flow Yield

This question practices a basic valuation concept that comes up often in investment banking interviews, understanding how to relate a company’s share price to the cash it generates. A strong answer should show that free cash flow yield focuses on cash available to equity holders, not just cash actually paid out, and should distinguish that from dividend yield and earnings based valuation multiples. Interviewers ask this because they want to see whether candidates can connect accounting measures, cash generation, and equity valuation in a practical way, and whether they understand the strengths and limitations of cash flow based metrics versus payout based or earnings based metrics.