Vogel ( jun 14)

Sorry - I did actually answer it but for some reason my answer disappeared!! (I was on a train in a foreign country at the time which could be the reason :-) ) 1. The earnings used in calculating PE ratios are the profits after interest and after tax. 2. Free cash flows to the firm are always before interest. (It is only when calculating free cash flows to equity that we subtract interest). I do explain this in my lectures. TAD is only added back is it has been subtracted. Here it has not been subtracted in arriving at the cash flows and so there is nothing to add back. The tax has been calculated as separate workings. 3. I really don't know and am not wasting time on it either :-) The figure is not required and there were not marks given for it :-)