What is the free cash flow to equity holders for a firm with free cash flow of $9,000, after-tax interest expense of $3,000, and an increase in debt of $1,000?
A) $6,000
B) $7,000
C) $8,000
D) $9,000

Question

Quizplus · Accepted Answer

B) Free cash flow to equity = Free cash flow - After-tax interest expense + Increase in debt
Free cash flow to equity = $9,000 - $3,000 + $1,000 = $7,000

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