What is the free cash flow to equity holders for a firm with free cash flow of $11,000, after-tax interest expense of $2,000, and an increase in debt of $2,000?
A) $7,000
B) $8,000
C) $9,000
D) $11,000

Question

Quizplus · Accepted Answer

D) Free cash flow to equity = Free cash flow - After-tax interest expense + Increase in debt
Free cash flow to equity= $11,000 - $2,000 + $2,000 = $11,000

What Is the Free Cash Flow to Equity Holders for a Firm