I’m slightly confused on some of the FCFE calculation. From the book I see two methods:
FCFE = NI + NCC - FCInv - WCInv + net borrowing
where net borrowing = Debt Ratio x (FCInv - Dep + WCInv)
FCFE = NI - (1 - Debt Ratio)(Cap Ex - Dep) - (1 - Debt Ratio)(WCInv)
where Cap Ex = FCInv
Is net borrowing = Debt Ratio x (FCInv - Dep + WCinv) or Debt Ratio x (FCInv - NCC + WCInv)
is Cap Ex equivalent to FCInv all the time?
Thanks in advance!