2070:
2060:
763:
formula above, but less interest and mandatory principal repayments. The unlevered cash flow (UFCF) is usually used as the industry norm, because it allows for easier comparison of different companies’ cash flows. It is also preferred over the levered cash flow when conducting analyses to test the impact of different capital structures on the company.
1119:, and is not audited. Management is free to disclose maintenance capex or not. Therefore, this input to the calculation of free cash flow may be subject to manipulation, or require estimation. Since it may be a large number, maintenance capex's uncertainty is the basis for some people's dismissal of 'free cash flow'.
1122:
A second problem with the maintenance capex measurement is its intrinsic 'lumpiness'. By their nature, expenditures for capital assets that will last decades may be infrequent, but costly when they occur. 'Free cash flow', in turn, will be very different from year to year. No particular year will be
500:
The second difference is that the free cash flow measurement makes adjustments for changes in net working capital, where the net income approach does not. Typically, in a growing company with a 30-day collection period for receivables, a 30-day payment period for purchases, and a weekly payroll, it
1147:
1984 cash flows of the ten largest oil companies were $ 48.5 billion, 28 percent of the total cash flows Going to
Dominic Anthony Ferrante out of Rancho Cordova of the top 200 firms in Dun's Business Month survey. Consistent with the agency costs of free cash flow, management did not pay out the
762:
Unlevered free cash flow (i.e., cash flows before interest payments) is defined as EBITDA − CAPEX − changes in net working capital − taxes. This is the generally accepted definition. If there are mandatory repayments of debt, then some analysts utilize levered free cash flow, which is the same
504:
When a company has negative sales growth, it's likely to lower its capital spending. Receivables, provided they are being timely collected, will also ratchet down. All this "deceleration" will show up as additions to free cash flow. However, over the long term, decelerating sales trends will
493:
Allowing for typical 2% inflation per year, equipment purchased 10 years ago for $ 100 would now cost about $ 122. With 10 year straight line depreciation the old machine would have an annual depreciation of $ 10, but the new, identical machine would have depreciation of $ 12.2, or 22% more.
785:
Free cash flow can be broken into its expected and unexpected components when evaluating firm performance. This is useful when valuing a firm because there are always unexpected developments in a firm's performance. Being able to factor in unexpected cash flows provides a financial model.
1142:
noted that free cash flows allowed firms' managers to finance projects earning low returns which, therefore, might not be funded by the equity or bond markets. Examining the US oil industry, which had earned substantial free cash flows in the 1970s and the early 1980s, he wrote that:
1092:
is a metric used to evaluate the sustainability of distributions from REITs, Oil and Gas
Royalty Trusts, and Income Trust. The distributions are divided by the free cash flow. Distributions may include any income, flowed-through capital gains or
449:
There are two differences between net income and free cash flow. The first is the accounting for the purchase of capital goods. Net income deducts depreciation, while the free cash flow measure uses last period's net capital purchases.
1021:
1043:
will need to outlay cash to purchase inventory for profitable orders that it takes. The business can show a positive net income but have very negative cash flows as the cash gets stuck in the
508:
The net free cash flow definition should also allow for cash available to pay off the company's short term debt. It should also take into account any dividends that the company means to pay.
877:
1474:
1152:
Jensen also noted a negative correlation between exploration announcements and the market valuation of these firms—the opposite effect to research announcements in other industries.
629:
733:
1442:
113:
Free cash flow is a non-GAAP measure of performance. As such, there are many ways to calculate free cash flow. Below is one common method for calculating free cash flow:
1123:
a 'norm' that can be expected to be repeated. For companies that have stable capital expenditures, free cash flow will (over the long term) be roughly equal to earnings
51:
holders without causing issues in its operations. As such, it is an indicator of a company's financial flexibility and is of interest to holders of the company's
1467:
1264:
513:
Net free cash flow = Operation cash flow − Capital expenses to keep current level of operation − dividends − Current portion of long term debt − Depreciation
1148:
excess resources to shareholders. Instead, the industry continued to spend heavily on activity even though average returns were below the cost of capital.
1073:
to measure a company's financial performance and calculate the intrinsic value of the company, because free cash flow is more difficult to manipulate than
1039:
to shareholders if it wanted to. Even profitable businesses may have negative free cash flows. For example, a rapidly growing manufacturer with a positive
1460:
1333:
1236:
530:
If the net income category includes the income from discontinued operation and extraordinary income make sure it is not part of free cash flow.
527:
Depreciation should be taken out since this will account for future investment for replacing the current property, plant and equipment (PPE).
769:
FCFF = After tax operating income + Noncash charges (such as D&A) − CAPEX − Working capital expenditures = Free cash flow to firm (FCFF)
759:
may, or may not be deducted, depending on whether they are considered to be maintaining the status quo, or to be investments for growth.
1062:
of all future expected free cash flows. In this case, the present value is computed by discounting the free cash flows at the company's
885:
1116:
1439:
1031:
Free cash flow measures the cash that a company will pay as interest and principal repayment to bondholders plus the cash that it
672:
Investment is simply the net increase (decrease) in the firm's capital, from the end of one period to the end of the next period:
1317:
70:
Free cash flow can be calculated in various ways, depending on audience and available data. A common measure is to take the
518:
Here, capex definition should not include additional investment on new equipment. However, maintenance cost can be added.
501:
will require more working capital to finance the labor and profit components embedded in the growing receivables balance.
1220:
90:. Depending on the audience, a number of refinements and adjustments may also be made to try to eliminate distortions.
71:
1417:
1394:
792:
772:
FCFE = Net income + Noncash charges (such as D&A) − CAPEX − Change in non-cash working capital + Net borrowing =
1941:
1191:
1063:
647:
524:
Current portion of long term debt will be the minimum debt that the company needs to pay in order to not default.
1385:
1854:
533:
Net of all the above give free cash available to be reinvested in operations without having to take more debt.
2000:
568:
1794:
678:
1518:
1911:
47:). It is that portion of cash flow that can be extracted from a company and distributed to creditors and
1115:. It must be separated from the expenditures for growth purposes. This split is not a requirement under
1874:
2045:
2030:
2020:
1859:
1674:
1055:
2063:
2040:
1978:
1804:
1729:
1689:
1669:
1349:
1288:
1134:
773:
2094:
1774:
1764:
1734:
1704:
1644:
1433:
1112:
521:
Dividends will be the base dividend that the company intends to distribute to its share holders.
193:
140:
79:
2015:
1916:
1779:
1617:
1587:
1347:
Jensen, Michael C. (1986). "Agency costs of free cash flow, corporate finance and takeovers".
1931:
1210:
1040:
1953:
1948:
1452:
1181:
1171:
1051:
64:
20:
8:
1903:
552:
545:
308:
170:
87:
44:
199:
When net profit and tax rate applicable are given, you can also calculate it by taking:
2099:
2073:
1985:
1968:
1926:
1849:
1841:
1627:
1612:
1487:
1366:
1327:
1230:
1161:
2010:
479:
Capital investments are at the discretion of management, so spending may be sporadic.
2005:
1990:
1921:
1864:
1809:
1784:
1754:
1744:
1654:
1637:
1558:
1553:
1513:
1508:
1495:
1483:
1413:
1390:
1313:
1216:
1166:
1139:
1094:
1082:
1370:
1963:
1958:
1869:
1824:
1724:
1622:
1543:
1528:
1503:
1406:
1358:
1176:
748:
222:
2025:
1936:
1889:
1879:
1814:
1739:
1709:
1659:
1607:
1579:
1523:
1446:
1044:
328:
241:
159:
102:
83:
60:
1884:
1186:
2088:
1592:
1059:
756:
43:
exceeds its working capital needs and expenditures on fixed assets (known as
1831:
1679:
1664:
1538:
1089:
136:
98:
75:
1789:
1759:
1602:
1533:
176:
Prior and current balance sheets: Property, plant and equipment accounts
766:
Investment bankers compute free cash flow using the following formulae:
246:
Prior and current balance sheets: Current assets and liability accounts
164:
Prior and current balance sheets: Current assets and liability accounts
2035:
1995:
1799:
1749:
1719:
1597:
1382:
1362:
1074:
1070:
278:
Net capital expenditure (CAPEX) = Capex − Depreciation and amortization
252:
94:
48:
1211:
Ross, Stephen A; Westerfield, Randolph W.; Bradford, Jordan D (2022).
1769:
1632:
1078:
1036:
350:
where d is the debt/equity ratio, e.g. for a 3:4 mix it will be 3/7.
192:
Note that the first three lines above are calculated on the standard
40:
1819:
1714:
1699:
555:
or "capex"), but this does not include increase in working capital.
1016:{\displaystyle E(FCF_{t})=FCF_{t}-1*(FCF_{t-1}/FCF_{t-3})^{1/2}\,}
1649:
1383:
Brealey, Richard A.; Myers, Stewart C.; Allen, Franklin (2005).
1312:(6th ed.). Hauppagge, NY: Barron's. pp. 137, 285–286.
1107:
The expenditures for maintenances of assets is only part of the
1307:
1548:
1108:
52:
1482:
490:
Charges are smoothed, related to cumulative prior purchases
394:
Same as statement of cash flows: Section 1, from operations
285:
When Profit After Tax and Debt/Equity ratio are available:
56:
1077:. The problems with this approach are discussed in the
97:, as free cash flow takes into account the purchase of
1069:
Some investors prefer using free cash flow instead of
1101:
888:
795:
681:
571:
281:
Tax shield = Net interest expense × Marginal tax rate
425:
Statement of cash flows: Section 2, from investment
417:
Statement of cash flows: Section 1, from operations
1405:
1015:
871:
727:
623:
1265:"Discounted Cash Flow Analysis | Street Of Walls"
2086:
551:Less expenditures necessary to maintain assets (
39:) is the amount by which a business's operating
872:{\displaystyle FCF_{t}=E(FCF_{t})+U(FCF_{t})\,}
67:, as well as potential lenders and investors.
1468:
782:FCFE = FCFF + Net borrowing − Interest*(1−t)
444:
1332:: CS1 maint: multiple names: authors list (
1235:: CS1 maint: multiple names: authors list (
1215:(13th ed.). Boston: McGraw-Hill Irwin.
1389:(8th ed.). Boston: McGraw-Hill/Irwin.
1047:, namely inventory and accounts receivable.
2069:
2059:
1475:
1461:
127:Earnings before interest and taxes (EBIT)
1434:Free Cash Flow: Free, But Not Always Easy
1012:
868:
724:
620:
319:+ Depreciation and amortization × (1−d)
1403:
1308:Nikbakht, E. and Groppelli, A. (2012).
664:is the firm's investment during period
624:{\displaystyle FCF_{t}=OCB_{t}-I_{t}\,}
2087:
1346:
668:including variation of working capital
536:
82:, and then subtract taxes, changes in
1456:
728:{\displaystyle I_{t}=K_{t}-K_{t-1}\,}
473:Prior period net investment spending
334:Balance Sheets, Cash Flow Statements
314:Balance sheets, cash flow statements
93:Free cash flow may be different from
1289:"Cash Flow Growth and Stock Returns"
1251:Westerfield, Ross and Jordan op cit
322:Prior & Current Balance Sheets
13:
1102:Problems with capital expenditures
422:− Investment in Operating Capital
232:− Net capital expenditure (CAPEX)
72:earnings before interest and taxes
14:
2111:
1427:
1213:Fundamentals of Corporate Finance
383:Prior and current balance sheets
2068:
2058:
1404:Stewart, G. Bennett III (1991).
1192:Weighted average cost of capital
1064:weighted average cost of capital
1050:According to one version of the
648:net operating profit after taxes
372:+ Depreciation and amortization
1386:Principles of Corporate Finance
1127:
476:Spending is in current dollars
108:
1855:Debtor-in-possession financing
1340:
1301:
1281:
1257:
1243:
1204:
995:
942:
911:
892:
865:
846:
837:
818:
1:
1197:
380:− Changes in working capital
105:and excludes non-cash items.
1795:Staggered board of directors
1412:. New York: HarperBusiness.
7:
1912:Accretion/dilution analysis
1155:
414:Cash flows from operations
10:
2116:
1875:Leveraged recapitalization
445:Difference with net income
390:Cash flows from operations
2054:
2046:Valuation using multiples
2031:Sum-of-the-parts analysis
2001:Modigliani–Miller theorem
1902:
1860:Dividend recapitalization
1840:
1688:
1675:Secondary market offering
1578:
1567:
1494:
258:Current income statement
235:Current income statement
227:Current income statement
216:Current income statement
153:Current income statement
145:Current income statement
130:Current income statement
16:Financial accounting term
2064:List of investment banks
1979:Free cash flow to equity
1805:Super-majority amendment
1730:Management due diligence
1670:Seasoned equity offering
1350:American Economic Review
1135:American Economic Review
774:Free cash flow to equity
755:. Increases in non-cash
1775:Shareholder rights plan
1765:Post-merger integration
1735:Managerial entrenchment
1705:Contingent value rights
1645:Initial public offering
1440:What is Free Cash Flow?
1132:In a 1986 paper in the
1113:Statement of Cash Flows
1025:
299:Profit after tax (PAT)
194:statement of cash flows
1917:Adjusted present value
1780:Special-purpose entity
1618:Direct public offering
1588:At-the-market offering
1150:
1017:
873:
747:represents the firm's
729:
650:(NOPAT) during period
625:
558:Less interest charges.
65:convertible securities
33:free cash flow to firm
1932:Conglomerate discount
1269:www.streetofwalls.com
1145:
1054:valuation model, the
1045:working capital cycle
1041:cash conversion cycle
1018:
874:
751:at the end of period
730:
626:
505:eventually catch up.
1954:Economic value added
1949:Discounted cash flow
1182:Economic value added
1172:Discounted cash flow
1058:of a company is the
1052:discounted cash flow
886:
793:
679:
569:
553:capital expenditures
487:Depreciation charge
255:on interest expense
45:capital expenditures
21:financial accounting
1539:Senior secured debt
1408:The Quest for Value
546:Operating cash flow
537:Alternative formula
309:capital expenditure
171:Capital expenditure
88:capital expenditure
2074:Outline of finance
1986:Market value added
1969:Financial modeling
1927:Business valuation
1850:Debt restructuring
1628:Follow-on offering
1613:Corporate spin-off
1571:(terms/conditions)
1488:investment banking
1445:2022-02-15 at the
1363:10.2139/ssrn.99580
1162:Business valuation
1013:
869:
725:
621:
2082:
2081:
2006:Net present value
1991:Minority interest
1922:Associate company
1898:
1897:
1865:Financial sponsor
1785:Special situation
1755:Pre-emption right
1745:Minority discount
1655:Private placement
1554:Subordinated debt
1509:Exchangeable debt
1496:Capital structure
1484:Corporate finance
1319:978-0-7641-4759-3
1253:. pp. 31–33.
1167:Cashflow forecast
1095:return of capital
1083:return of capital
498:
497:
456:Measurement type
442:
441:
398:
397:
375:Income statement
367:Income statement
348:
347:
302:Income statement
272:
271:
240:− Net changes in
190:
189:
2107:
2072:
2071:
2062:
2061:
1964:Fairness opinion
1959:Enterprise value
1942:Weighted average
1870:Leveraged buyout
1725:Drag-along right
1623:Equity carve-out
1580:Equity offerings
1576:
1575:
1572:
1544:Shareholder loan
1529:Second lien debt
1524:Preferred equity
1504:Convertible debt
1477:
1470:
1463:
1454:
1453:
1423:
1411:
1400:
1375:
1374:
1344:
1338:
1337:
1331:
1323:
1305:
1299:
1298:
1296:
1295:
1285:
1279:
1278:
1276:
1275:
1261:
1255:
1254:
1247:
1241:
1240:
1234:
1226:
1208:
1177:Enterprise value
1111:reported on the
1022:
1020:
1019:
1014:
1011:
1010:
1006:
993:
992:
971:
966:
965:
932:
931:
910:
909:
878:
876:
875:
870:
864:
863:
836:
835:
811:
810:
749:invested capital
734:
732:
731:
726:
723:
722:
704:
703:
691:
690:
630:
628:
627:
622:
619:
618:
606:
605:
587:
586:
453:
452:
403:
402:
353:
352:
288:
287:
223:Interest expense
202:
201:
116:
115:
2115:
2114:
2110:
2109:
2108:
2106:
2105:
2104:
2085:
2084:
2083:
2078:
2050:
2026:Stock valuation
2021:Residual income
1937:Cost of capital
1894:
1890:Project finance
1880:High-yield debt
1836:
1815:Tag-along right
1740:Mandatory offer
1710:Control premium
1691:
1684:
1660:Public offering
1608:Bought out deal
1570:
1569:
1563:
1490:
1481:
1447:Wayback Machine
1430:
1420:
1397:
1379:
1378:
1345:
1341:
1325:
1324:
1320:
1306:
1302:
1293:
1291:
1287:
1286:
1282:
1273:
1271:
1263:
1262:
1258:
1249:
1248:
1244:
1228:
1227:
1223:
1209:
1205:
1200:
1158:
1130:
1104:
1056:intrinsic value
1028:
1002:
998:
994:
982:
978:
967:
955:
951:
927:
923:
905:
901:
887:
884:
883:
859:
855:
831:
827:
806:
802:
794:
791:
790:
746:
712:
708:
699:
695:
686:
682:
680:
677:
676:
663:
645:
614:
610:
601:
597:
582:
578:
570:
567:
566:
539:
470:Free cash flow
447:
329:working capital
242:working capital
160:working capital
111:
103:working capital
101:and changes in
84:working capital
61:preferred stock
17:
12:
11:
5:
2113:
2103:
2102:
2097:
2095:Business terms
2080:
2079:
2077:
2076:
2066:
2055:
2052:
2051:
2049:
2048:
2043:
2041:Terminal value
2038:
2033:
2028:
2023:
2018:
2013:
2008:
2003:
1998:
1993:
1988:
1983:
1982:
1981:
1974:Free cash flow
1971:
1966:
1961:
1956:
1951:
1946:
1945:
1944:
1934:
1929:
1924:
1919:
1914:
1908:
1906:
1900:
1899:
1896:
1895:
1893:
1892:
1887:
1885:Private equity
1882:
1877:
1872:
1867:
1862:
1857:
1852:
1846:
1844:
1838:
1837:
1835:
1834:
1829:
1828:
1827:
1817:
1812:
1807:
1802:
1797:
1792:
1787:
1782:
1777:
1772:
1767:
1762:
1757:
1752:
1747:
1742:
1737:
1732:
1727:
1722:
1717:
1712:
1707:
1702:
1696:
1694:
1686:
1685:
1683:
1682:
1677:
1672:
1667:
1662:
1657:
1652:
1647:
1642:
1641:
1640:
1630:
1625:
1620:
1615:
1610:
1605:
1600:
1595:
1590:
1584:
1582:
1573:
1565:
1564:
1562:
1561:
1556:
1551:
1546:
1541:
1536:
1531:
1526:
1521:
1516:
1514:Mezzanine debt
1511:
1506:
1500:
1498:
1492:
1491:
1480:
1479:
1472:
1465:
1457:
1451:
1450:
1437:
1436:, Investopedia
1429:
1428:External links
1426:
1425:
1424:
1418:
1401:
1395:
1377:
1376:
1357:(2): 323–329.
1339:
1318:
1300:
1280:
1256:
1242:
1222:978-1260772395
1221:
1202:
1201:
1199:
1196:
1195:
1194:
1189:
1187:Owner earnings
1184:
1179:
1174:
1169:
1164:
1157:
1154:
1140:Michael Jensen
1129:
1126:
1125:
1124:
1120:
1103:
1100:
1099:
1098:
1086:
1067:
1048:
1027:
1024:
1009:
1005:
1001:
997:
991:
988:
985:
981:
977:
974:
970:
964:
961:
958:
954:
950:
947:
944:
941:
938:
935:
930:
926:
922:
919:
916:
913:
908:
904:
900:
897:
894:
891:
880:
879:
867:
862:
858:
854:
851:
848:
845:
842:
839:
834:
830:
826:
823:
820:
817:
814:
809:
805:
801:
798:
757:current assets
742:
736:
735:
721:
718:
715:
711:
707:
702:
698:
694:
689:
685:
670:
669:
659:
654:
646:is the firm's
641:
632:
631:
617:
613:
609:
604:
600:
596:
593:
590:
585:
581:
577:
574:
560:
559:
556:
549:
541:FCF measures:
538:
535:
496:
495:
491:
488:
485:
481:
480:
477:
474:
471:
467:
466:
463:
460:
457:
446:
443:
440:
439:
437:
435:free cash flow
427:
426:
423:
419:
418:
415:
411:
410:
407:
396:
395:
392:
385:
384:
381:
377:
376:
373:
369:
368:
365:
361:
360:
357:
346:
345:
343:
341:Free cash flow
336:
335:
332:
324:
323:
320:
316:
315:
312:
304:
303:
300:
296:
295:
292:
283:
282:
279:
270:
269:
267:
265:Free cash flow
260:
259:
256:
248:
247:
244:
237:
236:
233:
229:
228:
225:
218:
217:
214:
210:
209:
206:
188:
187:
185:
183:Free cash flow
178:
177:
174:
166:
165:
162:
155:
154:
151:
147:
146:
143:
132:
131:
128:
124:
123:
120:
110:
107:
25:free cash flow
15:
9:
6:
4:
3:
2:
2112:
2101:
2098:
2096:
2093:
2092:
2090:
2075:
2067:
2065:
2057:
2056:
2053:
2047:
2044:
2042:
2039:
2037:
2034:
2032:
2029:
2027:
2024:
2022:
2019:
2017:
2014:
2012:
2009:
2007:
2004:
2002:
1999:
1997:
1994:
1992:
1989:
1987:
1984:
1980:
1977:
1976:
1975:
1972:
1970:
1967:
1965:
1962:
1960:
1957:
1955:
1952:
1950:
1947:
1943:
1940:
1939:
1938:
1935:
1933:
1930:
1928:
1925:
1923:
1920:
1918:
1915:
1913:
1910:
1909:
1907:
1905:
1901:
1891:
1888:
1886:
1883:
1881:
1878:
1876:
1873:
1871:
1868:
1866:
1863:
1861:
1858:
1856:
1853:
1851:
1848:
1847:
1845:
1843:
1839:
1833:
1830:
1826:
1823:
1822:
1821:
1818:
1816:
1813:
1811:
1808:
1806:
1803:
1801:
1798:
1796:
1793:
1791:
1788:
1786:
1783:
1781:
1778:
1776:
1773:
1771:
1768:
1766:
1763:
1761:
1758:
1756:
1753:
1751:
1748:
1746:
1743:
1741:
1738:
1736:
1733:
1731:
1728:
1726:
1723:
1721:
1718:
1716:
1713:
1711:
1708:
1706:
1703:
1701:
1698:
1697:
1695:
1693:
1687:
1681:
1678:
1676:
1673:
1671:
1668:
1666:
1663:
1661:
1658:
1656:
1653:
1651:
1648:
1646:
1643:
1639:
1636:
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1634:
1631:
1629:
1626:
1624:
1621:
1619:
1616:
1614:
1611:
1609:
1606:
1604:
1601:
1599:
1596:
1594:
1593:Book building
1591:
1589:
1586:
1585:
1583:
1581:
1577:
1574:
1566:
1560:
1557:
1555:
1552:
1550:
1547:
1545:
1542:
1540:
1537:
1535:
1532:
1530:
1527:
1525:
1522:
1520:
1517:
1515:
1512:
1510:
1507:
1505:
1502:
1501:
1499:
1497:
1493:
1489:
1485:
1478:
1473:
1471:
1466:
1464:
1459:
1458:
1455:
1449:, Morningstar
1448:
1444:
1441:
1438:
1435:
1432:
1431:
1421:
1419:0-88730-418-4
1415:
1410:
1409:
1402:
1398:
1396:0-07-295723-9
1392:
1388:
1387:
1381:
1380:
1372:
1368:
1364:
1360:
1356:
1352:
1351:
1343:
1335:
1329:
1321:
1315:
1311:
1304:
1290:
1284:
1270:
1266:
1260:
1252:
1246:
1238:
1232:
1224:
1218:
1214:
1207:
1203:
1193:
1190:
1188:
1185:
1183:
1180:
1178:
1175:
1173:
1170:
1168:
1165:
1163:
1160:
1159:
1153:
1149:
1144:
1141:
1137:
1136:
1121:
1118:
1114:
1110:
1106:
1105:
1096:
1091:
1087:
1084:
1080:
1076:
1072:
1068:
1065:
1061:
1060:present value
1057:
1053:
1049:
1046:
1042:
1038:
1034:
1030:
1029:
1023:
1007:
1003:
999:
989:
986:
983:
979:
975:
972:
968:
962:
959:
956:
952:
948:
945:
939:
936:
933:
928:
924:
920:
917:
914:
906:
902:
898:
895:
889:
860:
856:
852:
849:
843:
840:
832:
828:
824:
821:
815:
812:
807:
803:
799:
796:
789:
788:
787:
783:
780:
777:
775:
770:
767:
764:
760:
758:
754:
750:
745:
741:
719:
716:
713:
709:
705:
700:
696:
692:
687:
683:
675:
674:
673:
667:
662:
658:
655:
653:
649:
644:
640:
637:
636:
635:
615:
611:
607:
602:
598:
594:
591:
588:
583:
579:
575:
572:
565:
564:
563:
557:
554:
550:
547:
544:
543:
542:
534:
531:
528:
525:
522:
519:
516:
515:
514:
509:
506:
502:
492:
489:
486:
483:
482:
478:
475:
472:
469:
468:
465:Disadvantage
464:
461:
458:
455:
454:
451:
438:
436:
433:
429:
428:
424:
421:
420:
416:
413:
412:
408:
405:
404:
401:
393:
391:
387:
386:
382:
379:
378:
374:
371:
370:
366:
363:
362:
358:
355:
354:
351:
344:
342:
338:
337:
333:
330:
327:− Changes in
326:
325:
321:
318:
317:
313:
310:
307:− Changes in
306:
305:
301:
298:
297:
293:
290:
289:
286:
280:
277:
276:
275:
268:
266:
262:
261:
257:
254:
250:
249:
245:
243:
239:
238:
234:
231:
230:
226:
224:
220:
219:
215:
212:
211:
207:
204:
203:
200:
197:
195:
186:
184:
180:
179:
175:
172:
168:
167:
163:
161:
158:− Changes in
157:
156:
152:
149:
148:
144:
142:
138:
134:
133:
129:
126:
125:
121:
118:
117:
114:
106:
104:
100:
99:capital goods
96:
91:
89:
85:
81:
77:
73:
68:
66:
62:
58:
54:
50:
46:
42:
38:
34:
30:
26:
22:
2016:Real options
1973:
1832:Tender offer
1692:acquisitions
1680:Underwriting
1665:Rights issue
1568:Transactions
1407:
1384:
1354:
1348:
1342:
1309:
1303:
1292:. Retrieved
1283:
1272:. Retrieved
1268:
1259:
1250:
1245:
1212:
1206:
1151:
1146:
1133:
1131:
1128:Agency costs
1090:payout ratio
1032:
881:
784:
781:
778:
771:
768:
765:
761:
752:
743:
739:
737:
671:
665:
660:
656:
651:
642:
638:
633:
562:In symbols:
561:
540:
532:
529:
526:
523:
520:
517:
512:
511:
510:
507:
503:
499:
448:
434:
431:
409:Data source
399:
389:
349:
340:
284:
273:
264:
198:
191:
182:
141:Amortization
137:Depreciation
112:
109:Calculations
92:
80:amortization
76:depreciation
69:
36:
32:
28:
24:
18:
1790:Squeeze-out
1760:Proxy fight
1690:Mergers and
1603:Bought deal
1534:Senior debt
779:Or simply:
484:Net income
400:Therefore,
364:Net income
213:Net profit
2089:Categories
2036:Tax shield
1996:Mismarking
1800:Stock swap
1750:Pitch book
1720:Divestment
1598:Bookrunner
1519:Pari passu
1294:2024-03-12
1274:2016-12-13
1198:References
1075:net income
1071:net income
462:Advantage
459:Component
253:Tax shield
95:net income
49:securities
2100:Cash flow
2011:Pure play
1904:Valuation
1770:Sell side
1633:Greenshoe
1328:cite book
1231:cite book
1085:articles.
1079:cash flow
1037:dividends
987:−
960:−
940:∗
934:−
717:−
706:−
608:−
41:cash flow
1842:Leverage
1820:Takeover
1715:Demerger
1700:Buy side
1443:Archived
1371:56152627
1156:See also
406:Element
356:Element
331:× (1−d)
311:× (1−d)
291:Element
205:Element
173:(CAPEX)
150:− Taxes
119:Element
1825:Reverse
1810:Synergy
1650:Pre-IPO
1638:Reverse
1559:Warrant
1310:Finance
1066:(WACC).
1035:pay in
882:Where:
776:(FCFE)
432:Levered
359:Source
294:Source
208:Source
122:Source
1416:
1393:
1369:
1316:
1219:
738:where
634:where
274:where
139:&
74:, add
53:equity
31:) or
1549:Stock
1367:S2CID
1109:capex
1033:could
548:(OCF)
1486:and
1414:ISBN
1391:ISBN
1334:link
1314:ISBN
1237:link
1217:ISBN
1117:GAAP
1088:The
1081:and
1026:Uses
86:and
78:and
63:and
57:debt
37:FCFF
1359:doi
639:OCB
29:FCF
19:In
2091::
1365:.
1355:76
1353:.
1330:}}
1326:{{
1267:.
1233:}}
1229:{{
1138:,
430:=
388:=
339:=
263:=
251:−
221:+
196:.
181:=
169:−
135:+
59:,
55:,
23:,
1476:e
1469:t
1462:v
1422:.
1399:.
1373:.
1361::
1336:)
1322:.
1297:.
1277:.
1239:)
1225:.
1097:.
1008:2
1004:/
1000:1
996:)
990:3
984:t
980:F
976:C
973:F
969:/
963:1
957:t
953:F
949:C
946:F
943:(
937:1
929:t
925:F
921:C
918:F
915:=
912:)
907:t
903:F
899:C
896:F
893:(
890:E
866:)
861:t
857:F
853:C
850:F
847:(
844:U
841:+
838:)
833:t
829:F
825:C
822:F
819:(
816:E
813:=
808:t
804:F
800:C
797:F
753:t
744:t
740:K
720:1
714:t
710:K
701:t
697:K
693:=
688:t
684:I
666:t
661:t
657:I
652:t
643:t
616:t
612:I
603:t
599:B
595:C
592:O
589:=
584:t
580:F
576:C
573:F
35:(
27:(
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