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)
2
Q
How to calculate the Free Cash Flow (FCF)?
A
FCF = EBIT*(1-t) + depreciation - CAPEX - delta_NetWorkingCapital
3
Q
What is the NPV rule? (when to accept project)?
A
if NPV > 0 accept
4
Q
What is the value of the firm using a integrated model?
A
IV = FV + SV + EV
