Hi all, When you calculate FCFE, if you have raised addition capital by selling sotcks, where does this go? How is it different from net borrowing? Thanks S
FCFE = CFO - capex + Net borrowing - Net debt repayment I believe if you’ve raised capitab le by selling stocks, its not going to be in CFO, itls going ot be in CFF. hence it will not afffect your calculation for FCFE
pepp Wrote: ------------------------------------------------------- > FCFE = CFO - capex + Net borrowing - Net debt > repayment > > I believe if you’ve raised capitab le by selling > stocks, its not going to be in CFO, itls going ot > be in CFF. hence it will not afffect your > calculation for FCFE you are right. FCF is simply CFO - cap ex. Its the excess cash left to a firm so that it can repo shares and pay dividends, etc. it is free in the sense that it belongs to shareholders.