Question: An analyst is building a DCF using the unlevered approach and calculates unlevered free cash flows of $ 1 0 0 in the first forecast

An analyst is building a DCF using the unlevered approach and calculates unlevered free cash flows of $100 in the first forecast year and net debt of $800($1,000 in gross debt, less $200 in cash). After checking her work, she realizes that she did not reflect the following information in her calculations.
The company is expected to report $20 in noncontrolling interest expense in the first forecast year.
There is a $300 noncontrolling interest balance on the balance sheet which she believes reflects the market value of the minority holdings.
Which of the following is the most appropriate treatment of the noncontrolling interests?

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