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business1

  • 4 years ago

excerpt from book: "in the case where the capital expenditures and the working capital are expected to be financed at a fixed debt ratio d, and principal repayments are made from new debt issues, the FCFE is measured as follows: FCFE = Net Income + (1-d) (Capital Expenditures - Depreciation) + (1-d) D Working Capital". should the equation not be: FCFE = Net Income - (1-d) (Capital Expenditures - Depreciation) - (1-d) D Working Capital? thanks

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  1. Aswath
    • 4 years ago
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    Yes. That was my mistake.

  2. business1
    • 4 years ago
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    thanks.

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