formula for FCFF

[hw0799]

FCFF=Net income -(1-DR)*(FCInv-Depreciation)-(1-DR)*(WCinv)
what does DR refer to? Thanks.

 

[3_letters]

debt ratio….are you getting ready for L2/09? Keener!

 

[aladak]

hahaa

 

[hw0799]

if finaced by 40% of debt, then we should plug in (1-0.4), is it, it is not debt/equity ratio? Thanks.
3_letters Wrote:
——————————————————-
> debt ratio….are you getting ready for L2/09?
> Keener!

 

[Sponge_Bob_CFA]

DR is “a” debt ratio, but it is target debt-to-assets.

 

[Alayle]

This is used as a tool to forecast FCFE, not FCFF

 

[Sponge_Bob_CFA]

Good catch, I didn’t even see he had written FCFF.