You are trying to estimate the expected free cash flow next year for Brown Forman, a leading U$.$S$.$ wine and spirits producer. In $1996,$ Brown Forman had after$-$tax operating income $[$EBIT$(1-$t$)]$ of $ $238$ million; it had a book value of equity of $ $784$ million and book value of debt of $ $233$ million. Assume that you expect after$-$tax operating income to grow $0\mathrm{.}11$ in $1997,$ and no change in the firm$$s after$-$tax return on capital. Estimate the free cash flow to the firm in $1997.$

You Answered

$165$

Correct Answer

$140$ margin of error $+/-10$