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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Free cash flow to firm
hey John!!
Do we add the
1. Finance income net of tax
2.Dividends received from subsidiary net of tax
when we calculate the FCF to FIRM?
I know we do add the above for FCFequity but im not sure on FCFF.
Hope you can clear this out.
Since all the calculations mention Operating profit at the begining I’m not sure whether these come in for FCFF.
Yes you would add both to get the free cash flow to the firm.
(The only difference when you do free cash flow to equity is that then you subtract interest paid and loans repaid)