Valuation: Free Cash Flow to Firm (FCFF) vs Free Cash flow to Equity (FCFE)

Valuation model that reconciles FCFF and FCFE


User must define the following inputs:
- Earnings before interest and taxes
- Expected growth for next 5 years
-Expected growth after year 5
-Tax rate
-Debt ratio for the firm
-Cost of equity
- Pre-tax cost of debt
- Return on capital in high growth
- Return on capital in stable growth

Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (

This business tool includes
1 Excel Model

Prof. Aswath Damodaran offers you this business tool for free!

Download for free


Further information

- Value of Firm
- Value of Equity
- Value of Debt
- Cost of Equity
- Pre-tax Cost of Debt
- After-tax Cost of Debt
- Cost of Capital


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