In Schweser’s concept checker, there is a question about calculating the value of the equity. One question asked us to calculate value of firm with single-staged FCFF, the minus market value of debt to find out the value of equity. The other one uses single-staged FCFE calculation. The two values are close but not the same. why is this? where is the discrapency?
A short section in CFAI books explains this…right after the “concept” of each valuation