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How do you identify from the Question that it wants a FCF or a FCFE valuation?
I am confused by the both methods as they are almost the same.
I understand FCF is for shareholders and debt holder but FCFE is also for shareholders too?
The question will make it clear somewhere.
FCF looks at the total cash flows available for all investors and is discounted at the WACC to get the total value of the business.
FCFE looks at the flows available only for shareholders (so after interest on debt) and is discounted at the shareholders required return to get the value of the equity.
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