While valuing the equity of Rio National Corp. (from the previous problem), Katrina Shaar is considering the
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a. State two adjustments that Shaar should make to cash flow from operations to obtain free cash flow to equity.
b. Shaar decides to calculate Rio Nationals FCFE for the year 2010, starting with net income. Determine for each of the five supplemental notes given in Table H whether an adjustment should be made to net income to calculate Rio Nationals free cash flow to equity for the year 2010, and the dollar amount of any adjustment.
c. Calculate Rio Nationals free cash flow to equity for the year2010. Free Cash Flow
Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the...
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