Reading 43: Free Cash Flow Valuation-LOS a 习题精选 - Equity - 【CFA二级试题精选】 - CFA论坛

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发表于 2011-3-18 14:44 | 只看该作者

Free cash flow to equity valuation uses which discount rate?

A)	Weighted average cost of capital.

B)	Cost of equity.

C)	After-tax cost of debt.

Free cash flow to equity valuation uses the opportunity cost relevant to stockholders, which is the cost of equity.

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发表于 2011-3-18 14:44 | 只看该作者

The difference between free cash flow to equity (FCFE) and free cash flow to the firm (FCFF) is:

A)	earnings before interest and taxes (EBIT) less taxes.

B)	after-tax interest and net borrowing.

C)	before-tax interest and net borrowing.

FCFE = FCFF – [interest expense] (1 – tax rate) + net borrowing.