You're a stock analyst trying to forecast a firm's operating free cash flow (OFCF, which excludes...
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You're a stock analyst trying to forecast a firm's operating free cash flow (OFCF, which excludes interest tax shields) based on figures from your forecast cash flow statement. Assume that the: -Debt liabilities are priced at par, so interest expense (IntExp) equals actual interest payments. This means that interest expense is a cash flow, so interest expense is not added back to net income in the 'operating activities' section of the cashflow statement: -'Net cash provided by investing activities' is equal to negative one multiplied by the firm's positive capital expenditure. -'Net cash provided by financing activities' is equal to negative one multiplied by the firm's dividend payments. -Corporate tax rate is 30%. OFCF equals 'Net cash provided by operating activities' plus: a. 'Net cash provided by investing activities'. O b. 'Net cash provided by investing activities' plus IntExp*(1-tc). O C. 'Net cash provided by investing activities' plus IntExp. O d. 'Net cash provided by financing activities' plus IntExp*(1-tc). O e. 'Net cash provided by financing activities' plus IntExp. You're a stock analyst trying to forecast a firm's operating free cash flow (OFCF, which excludes interest tax shields) based on figures from your forecast cash flow statement. Assume that the: -Debt liabilities are priced at par, so interest expense (IntExp) equals actual interest payments. This means that interest expense is a cash flow, so interest expense is not added back to net income in the 'operating activities' section of the cashflow statement: -'Net cash provided by investing activities' is equal to negative one multiplied by the firm's positive capital expenditure. -'Net cash provided by financing activities' is equal to negative one multiplied by the firm's dividend payments. -Corporate tax rate is 30%. OFCF equals 'Net cash provided by operating activities' plus: a. 'Net cash provided by investing activities'. O b. 'Net cash provided by investing activities' plus IntExp*(1-tc). O C. 'Net cash provided by investing activities' plus IntExp. O d. 'Net cash provided by financing activities' plus IntExp*(1-tc). O e. 'Net cash provided by financing activities' plus IntExp.
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0133400694
1st canadian edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
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