Below are data from the financial statements of Berkshire Audio.

Net income	$3,250.00
Common stock issued (net)	$650.00
Cash from operations (net)	$4,062.50
Cash from investing (net)	$(1,300.00)
Change in debt (net)	$(1,543.75)
Dividends paid	$1,300.00
Change in operating cash (net)	$568.75
Change in common equity (net)	$2,600.00

Compute the company’s free cash flow to equity using three different methods. (Each method should yield the same answer.)

Method 1
Dividends paid
less net issuance of common stock
Free cash flow to equity
Method 2
Cash from operations
less an increase in operating cash
plus cash from investing
plus increase in debt
Free cash flow to equity
Method 3
Net income
less increase in common equity
Free cash flow to equity

Answer rating: 100% (QA)

Solution The three methods for computing free cash flows Method 1 Free cash flow to equit... View the full answer