21: Free Cash Flow Valuation

Question 1

How do the following impact FCFF:
* Dividends
* Share Repurchase
* Share Issuance
* Change in leverage

Answer 1

No impact to FCFF

Question 2

How do the following impact FCFE:
* Dividends
* Share Repurchase
* Share Issuance
* Change in leverage

Answer 2

• Dividends: none
• Share Repurchase: none
• Share Issuance: none
  * Change in leverage: minor

Changes in debt: FCFE increases year debt was issued and FCFE decreases in following years through interest