Question
Indicate the effect on this periods FCFF and FCFE of a change in each of the items listed here. Assume a $100 increase in each
Indicate the effect on this periods FCFF and FCFE of a change in each of the items listed here. Assume a $100 increase in each case and a 40 percent tax rate.
19. A $100 increase in cash dividends paid will cause FCFF (Free Cash Flow to the Firm) to...
decrease $60.
increase $100.
decrease $40.
increase $40.
increase $60.
not change.
decrease $100.
20. A $100 increase in cash dividends paid will cause FCFE (Free Cash Flow to the Equity) to...
increase $40.
decrease $40.
decrease $60.
increase $60.
not change.
decrease $100.
increase $100.
21. A $100 increase in proceeds from new shares issued will cause FCFF (Free Cash Flow to the Firm) to...
increase $40.
increase $100.
decrease $100.
decrease $40.
not change.
decrease $60.
increase $60.
22. A $100 increase in proceeds from new shares issued will cause FCFE (Free Cash Flow to the Equity) to...
decrease $100.
decrease $40.
decrease $60.
increase $40.
increase $60.
increase $100.
not change.
23. A $100 increase in share repurchases will cause FCFF (Free Cash Flow to the Firm) to...
not change.
increase $100.
increase $60.
decrease $100.
increase $40.
decrease $40.
decrease $60.
24. A $100 increase in share repurchases will cause FCFE (Free Cash Flow to the Equity) to...
decrease $60.
not change.
decrease $40.
increase $40.
increase $60.
increase $100.
decrease $100.
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Corporate Finance For Dummies
Authors: Michael Taillard
2nd Edition
1119850312, 978-1119850311
