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Professor Baruch Lev weighs in on Yahoo's acquisition by Verizon

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Excerpt from Fortune -- "Verizon isn’t purchasing either the Alibaba or Yahoo Japan stakes, so it probably won’t be receiving those dividends. So if Yahoo is generating about $1.2 billion in annual free cash flow, the best assumption is that Verizon will get $142 million less, or $1.05 billion. 'That means Verizon is paying around five times free cash flow, based on the $4.8 billion price,' says Baruch Lev, distinguished professor of accounting at New York University’s Stern School of Business. 'That isn’t a high number. But I’m also assuming that almost all the cash flows excluding the dividends are going to Verizon. If that’s not the case, the multiple could be excessive.'"

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