Eagle product’s EBIT is $300, its tax rate is 35%, depreciation is $20, capital expenditure are $60, and the planned increase in net working capital is $30.The interest expense is $10 and the panned increase in debt is $5.
(a) What is the free cash flow to the firm?
(b) What is the free cash flow to equity?
Using FCFE to solve a two-stage valuation.