"Free Cash Flow" Essays and Research Papers

1 - 10 of 500

Free Cash Flow

combination of WACC and APV methods. As stated above, ACC will use the Leverage buy out (LBO) approach, which means that the debt to equity ratio of AirThread will not be the same from 2008 to 2012, so APV approach would be more suitable to valuate the cash flows between 2008 and 2012. After 2012, AirThread will de-lever to industry norm and thus, they will have a target leverage ratio; therefore WACC is best to estimate the terminal value. Finally, regarding the valuation of non-operating investments...

Premium Fundamental analysis, Debt, Interest 1228  Words | 6  Pages

Open Document

Free Cash Flow

Free cash flow In corporate finance, free cash flow (FCF) is cash flow available for distribution among all the securities holders of an organization. They include equity holders, debt holders, preferred stock holders, convertible security holders, and so on. G. Bennett Stewart - the "economic model of value holds that share prices are determined by just two things: the cash to be generated over the lifetime of a business and the risk of the cash receipts”. GSB (1990), “The Quest for Value”...

Premium Cash flow, Capital expenditure, Inventory 1468  Words | 6  Pages

Open Document

Free Cash Flow by C. Chang

Free Cash Flows Revised by C. Chang. Copyright 1996 by The McGraw-Hill Companies, Inc OUTLINE n  n  n  n  n  n  n  What is FCF? FCFF? FCFE? How Do You Calculate FCFF? FCFF Calculation– the CFO Method FCFF Calculation– the EBIT Method Equivalence: FCFF(CFO) vs FCFF(EBIT) Free Cash Flow to Equity (FCFE) Free Cash Flow Example What is FCF? FCFF? FCFE? n  Free Cash Flows to Firm (FCFF) n  The cash produced by the business activities of a firm available for...

Premium Stock, Balance sheet, Generally Accepted Accounting Principles 656  Words | 7  Pages

Open Document

Free Cash Flow and Pinkerton

finance the purchase with Financing Alternative #1 (debt and equity financing from an investment firm) or Alternative #2 (all debt financing from a bank). The financing alternatives are discussed on page 4 of the case. You should do the discounted cash flow valuation of the deal using Adjusted Present Value. The question is “What is Pinkerton worth to CPP (Wathen’s sole proprietorship)?” The value of Pinkerton to CPP is made up of three parts: 1. the value of Pinkerton as a stand-alone firm (but...

Premium Discounted cash flow, Free cash flow, Corporate finance 514  Words | 3  Pages

Open Document

Free Cash Flow

 evening  before   discussion Be prepared to discuss the case in class (your answers, your analysis, etc.) 1 Valuation - Use NPV approach How to make investment decisions: 1. Estimate (expected) cash flows in each time period 2. Choose an appropriate discount rate 3. Use discounted cash flow analysis to calculate NPV 4. Make decision that maximizes NPV Fundamental principle: V(A+B)>V(A)+V(B) Value driver:1)Eliminate overhead 3) Leveragen brom dname Pay its=D(P)(P-VC)-FC V(Pinkerton after)+V(CPP...

Premium Basic financial concepts, Free cash flow, Generally Accepted Accounting Principles 428  Words | 4  Pages

Open Document

Net Present Value and Free Cash Flow

points) * From the statement of AirThread case, we know that American Cable Communication want to raise capital by Leveraged Buyout (LBO) approach. This means ACC will finance money though equity and debt to buy AirThread and pay the debt by the cash flows or assets of AirThread. * In another word, it’s a highly levered transaction using a fixed WACC discount rate; however the leverage is changing in fact. * If we want to use WACC method, one assumption must be met: this program will not...

Premium Rate of return, Time value of money, Net present value 1090  Words | 5  Pages

Open Document

Cash Flow and Risk Free Asset

so. (10 points) This strategy does not consider risk. 3. The NuPress Valet Company has an improved version of its hotel stand. The investment cost is expected to be 72 million dollars and will return 13.50 million dollars for 5 years in net cash flows. The ratio of debt to equity is 1 to 1. The cost of equity is 13%, the cost of debt is 9%, and the tax rate is 34%. What is the NPV of the project? (10 points) WACC = .5*13+.5*9*(1-.34) = 9.47% PMT = 13,500,000, i=9.47%, n=5, PV = ?; NPV =...

Premium Total cost, Variable cost, Investment 621  Words | 3  Pages

Open Document

Simulation Finance

and Cash Flow. Pursue Big-Box Distribution Taking on Mega- Mart Inc. as a customer resulted in impressive top-line growth but the company's EBIT margin declined. Revenue'16'17'1805K10K $7,100 Opportunity EBIT'16'17'180250500 Opportunity Free Cash Flow'16'17'180-2K-1K -$241 Expand Online Presence Expanding SNC's presence in online retail increased sales with little negative impact on working capital balances. Revenue'16'17'1802K4K Opportunity EBIT'16'17'180100200300 Opportunity Free Cash Flow'16'17'180-400-200200...

Premium Generally Accepted Accounting Principles, Balance sheet, Invoice 749  Words | 4  Pages

Open Document

Fi 515

The financial statements of Lioi Steel Fabricators are shown below, with the actual results for 2010 and the projections for 2011. Free cash flow is expected to grow at a 6 percent rate after 2005. The weighted average cost of capital is 11%. Income Statement for the Year Ending December 31 (Millions of Dollars Except for Per Share Data) Actual Projected 2010 2011 Net sales $500.0 $530.0 Costs (except depreciation) 360.0 381.6 Depreciation ...

Premium Liability, Stock market, Stock 600  Words | 3  Pages

Open Document

Corp Finance Strategy Assignment

increased sharply. * The cash and short –term investment fell Effects of expansion on Liability & Equity side of the balance sheet: * Total current liability increased which inferred that suppliers were financed some amount spent for expansion * Long-term debt also increase to help the expansion * Only small amount of income that can be retained since it encounters a net loss and even it needs to pay the dividend. b. Conclusion from the Cash Flow: * Instead of contributing...

Premium Asset, Investment, Free cash flow 883  Words | 4  Pages

Open Document

Become a StudyMode Member

Sign Up - It's Free