The NewFiber company has sales of $2 billion, cost of goods sold of $600 million, total operating expense (including depreciation) of $300 million, and depreciation of $10 million. The company plans to invest $500 million in capital expenditure and $50 million in net working capital. The company is subject to a corporate tax rate of 21%.

What is the free cash flow to the firm (FCFF)?

What is the free cash flow to the equity holders (FCFE) if the interest expense is $5 million and the company plans to issue new debt of $200 million and does not retire any existing debt.

1. The NewFiber company has sales of $2 billion, cost of goods sold of $600 million, total operating expense (including depreciation) of $300 million, and depreciation of $10 million. The company plans to invest $500 million in capital expenditure and $50 million in net working capital. The company is subject to a corporate tax rate of 21%. a. What is the free cash flow to the firm (FCFF)? b. What is the free cash flow to the equity holders (FCFE) if the interest expense is $5 million and the company plans to issue new debt of $200 million and does not retire any existing debt.