You are evaluating a project that costs RM 5 million. The project is expected to generate free cash flow of $1 million the first year, and this free cash flow is expected to be the same every year. The levered equity cost of capital of 17%, the firm has a debt cost of capital of 5%, and a tax rate of 40%. Your firm maintains a debt-equity ratio of 1.0.

What is the free cash flow to equity for this project? (please provide the calculation way)

Answer rating: 100% (QA)

Calculating Free Cash Flow to Equity FCFE for the Project 1 Calculate the Enterprise Free Cash Flow ... View the full answer