Opening Video Flashcards

1
Q

What is the formula for the value of the firm using Free Cash Flow (FCF)?

A

Value_0= (FCFFt / (1+WACC))^t + (TV / (1+WACC))^n

where TV = FCFFn+1 / (WACCstable - Growth_stable)

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2
Q

How to calculate the Free Cash Flow (FCF)?

A

FCF = EBIT*(1-t) + depreciation - CAPEX - delta_NetWorkingCapital

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3
Q

What is the NPV rule? (when to accept project)?

A

if NPV > 0 accept

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4
Q

What is the value of the firm using a integrated model?

A

IV = FV + SV + EV

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