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Eagle products EBIT is $300, its tax rate is 35%, depreciation is $20, capital expenditure are $60, and the planned increase in net working capital

Eagle products 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

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