Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Calculating Free Cash Flow. Below are data from the financial statements of Berkshire Audio. Net income $2,750.00 Common stock issued (net) $550.00 Cash from operations
Calculating Free Cash Flow. Below are data from the financial statements of Berkshire Audio. Net income $2,750.00 Common stock issued (net) $550.00 Cash from operations (net) $3,437.50 Cash from investing (net) $(1,100.00) Change in debt (net) $(1,306.25) Dividends paid $1,100.00 Change in operating cash (net) $481.25 Change in common equity (net) $2,200.00 Compute the company's free cash flow to equity using three different methods. (Each method should yield the same answer.) Note: Round each entry to two decimal places. Note: Watch positive and negative signs carefully. Refer to Exhibit 12.5 for guidance. Method 1 $ $ Dividends paid less net issuance of common stock Free cash flow to equity Method 2 Cash from operations less an increase in operating cash plus cash from investing $ Change in common equity (net) $2,200.00 Compute the company's free cash flow to equity using three different methods. (Each method should yield the same answer.) Note: Round each entry to two decimal places. Note: Watch positive and negative signs carefully. Refer to Exhibit 12.5 for guidance. $ $ Method 1 Dividends paid less net issuance of common stock Free cash flow to equity Method 2 Cash from operations less an increase in operating cash plus cash from investing plus increase in debt Free cash flow to equity Method 3 $ $ $ Net income less increase in common equity Free cash flow to equity $ Check df
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started