Question

Free cash flows (FCF) used in DCF valuations discussed in the chapter are defined as follows:
FCF to debt and equity = Earnings before interest and taxes × (1-tax rate) + Depreciation and deferred taxes-Capital expenditures -/+ Increase/decrease in working capital
FCF to equity = Net income + Depreciation and deferred taxes - Capital expenditures -/+ Increase/decrease in working capital +/- Increase/decrease in debt.
 Which of the following items affect free cash flows to debt and equity holders? Which affect free cash flows to equity alone? Explain why and how.



$1.99
Sales0
Views104
Comments0
  • CreatedFebruary 11, 2015
  • Files Included
Post your question
5000