The free cash flow to equity in 2010 is closest to:
A)6255
B)10,684
C)11,559
D)18,394

Question

Quizplus · Accepted Answer

A)After-Tax interest expense = interest expense(1 - T_c)= 8160(1 - .35)= 5304 Note T_c = income tax/pre-tax income = 5678/16,223 = 35% FCF_firm = NI + after tax interest + Depreciation - ΔNWC - capital expenditures FCF_firm = 10,545 + 5304 + 15,848 - 7710 - 8000 = 11,559 FCF_equity = FCF_firm + Net borrowing - after tax interest expense FCF_equity =11,559 + 0 - 5304 = 6255

The Free Cash Flow to Equity in 2010 Is Closest