anonymous
  • anonymous
Hi, why does FCFF=EBIT(1-t)-Reinvestment? isn't the FCFF supposed to include the reinvestment?
Finance
jamiebookeater
  • jamiebookeater
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anonymous
  • anonymous
No, FCFF is the money after expenses and reinvestments.
anonymous
  • anonymous
FFCF is what is left over from after-tax EBIT after meeting reinvestment needs meaning net capex (capex-depreciation) and change in non cash working capital.
anonymous
  • anonymous
thanks, so the difference between FCFF and FCFE is only the interest, right?

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anonymous
  • anonymous
All esle being equal, do not forget net debt repayments (debt repayments - new debt).

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