Question 19 of 23 An analyst is building a DCF using the unlevered approach and calculates unlevered free cash flows of $100 in the first forecast year and net debt of $800 ($1,000 in gross debt, less $200 in cash). After checking her work, she realizes that she did not reflect the following information in her calculations: The company is expected to report $20 in noncontrolling interest expense in the first forecast year. There is a $300 noncontrolling interest balance on the balance sheet which she believes reflects the market value of the minority holdings Question: Which of the following is the most appropriate treatment of the noncontrolling interests? To calculate enterprise value, reduce the base year free cash flows from $100 to $80. To arrive at equity value, the analyst should increase net debt from $800 to $1,100. To calculate enterprise value, leave the base year free cash flows unchanged at $100. To arrive at equity value the analyst should increase net debt from $800 to $1,100. To calculate enterprise value, reduce the base year free cash flows from $100 to $80. To arrive at equity value, the analyst should increase net debt from $800 to $1,100. To calculate enterprise value, leave the base year free cash flows unchanged at $100. To arrive at equity value, the analyst should increase net debt from $800 to $1,100. To calculate enterprise value, leave the base year free cash flows unchanged at $100. To arrive at equity value, the analyst should leave net debt unchanged at $800. To calculate enterprise value, reduce the base year free cash flows from $109.40 $80. To arrive at equity value, the analyst should leave net debt unchanged at $800. Next