Hi:
Is Value of firm (FCFF) = value of equity (FCFE) + Total Debt or Total Liability?
Do we use total debt or total liability?
Because I found there are different answers for mock exams that I have done.
Thank you
Hi:
Is Value of firm (FCFF) = value of equity (FCFE) + Total Debt or Total Liability?
Do we use total debt or total liability?
Because I found there are different answers for mock exams that I have done.
Thank you
all i know is FCFF = FCFE + interest expense x (1-tax rate) - net borrowing
I thnk you use the market value of debt. So to me “total debt” sounds like it would be more appropriate than total liabilities.