Question #130
Reading: Reading 21 Free Cash Flow Valuation
PDF File: Reading 21 Free Cash Flow Valuation.pdf
Page: 64
Status: Unattempted
Question
A firm currently has the following per share values: Cash flow from operations (CFO) is $49.50. Investment in fixed capital is $40.00. Net borrowing is $7.50. What is the current per share free cash flow to equity (FCFE)?
Answer Choices:
A. $16.50
B. $97.00
C. $17.00
Explanation
FCFE = CFO − FCInv + net borrowing = $49.50 − $40.00 + $7.50 = $17.00