Last version published: 31/01/2017 15:55
Publication number: ELQ-15242-2
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Generalized Free Cash Flow for the Firm (FCFF) Model
Compute the FCFF (Free Cash Flow for the Firm) Model for a Firm with this excel spreadsheet
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The objective of this model is to get the following output values:
- Present Value of FCFF in high growth phase
- Present Value of Terminal Value of Firm
- Value of the firm
- Market Value of Debt
- Market Value of Equity
- Value of Options Outstanding (See option worksheet)
- Value of Equity in Common Stock
- Value of Equity per Share
Best suited for firms in transition
1. The firm is expected to grow at a higher growth rate in the first period.
2. The growth rate will drop at the end of the first period to the stable growth rate.
3. The free cashflow to equity is the correct measure of expected cashflows to stockholders.
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