27. FCFF=
NI Net Income
+ NCC Non-Cash Charge
- WCInv Working Capital Inv.
- FCInv Fixed Capital Inv.
+ Int*(1-t) After-tax interest
28. FCFF=
NI Net Income
+ NCC Non-Cash Charge
- WCInv Working Capital Inv.
- FCInv
+ Int*(1-t)
Current Asset Current Liability
WCInv=(CA1-CA0)-(CL1-CL0)
29. FCFF=
NI Net Income
+ NCC Non-Cash Charge
- WCInv Working Capital Inv.
- FCInv
+ Int*(1-t)
Cash and Cash Equivalents
Current Asset Current Liability
WCInv=(CA1-CA0)-(CL1-CL0)
30. FCFF=
NI Net Income
+ NCC Non-Cash Charge
- WCInv Working Capital Inv.
- FCInv
+ Int*(1-t)
Cash and Cash Equivalents
Current Asset Current Liability
WCInv=(CA1-CA0)-(CL1-CL0)
31. FCFF=
NI Net Income
+ NCC Non-Cash Charge
- WCInv Working Capital Inv.
- FCInv Fixed Capital Inv.
+ Int*(1-t) After-tax interest
32. FCFF=
NI Net Income
+ NCC Non-Cash Charge
- WCInv Working Capital Inv.
- FCInv Fixed Capital Inv.
+ Int*(1-t) After-tax interest
54. Two-Stage
Firm value Equity value
n
FCFF n
FCFEt
=โ t
=โ
t =1 (1 + WACC)t t =1 (1 + r )t
FCFF +1
n 1 FCFEn+1 1
+ +
(WACC - g) (1 + WACC)n r - g (1 + r )n
55. Forecasting
FCFE FCFE
= NI = NI
- (FCInv - Dep) - (1 - DebtRatio)(FCInv - Dep)
- WCInv - (1 - DebtRatio)(WCInv )
+ Net borrowing
FCInv - Dep WCInv
=ฮ =ฮ
โ Sales โ Sales