What is the free cash flow to equity holders for a firm with free cash flow of $7000, after-tax interest expense of $1,000, and an increase in debt of $3,000?
A) $6,000
B) $7,000
C) $8,000
D) $9,000

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= $7,000 - $1,000 + $3,000 = $9,000

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