CFA® Level II Equity Valuation - Derive FCFF and FCFE formulas with ease!

[@PatBatemanAM]

thank you, made this topic very easy to understand

[@PrepNuggets]

Great to hear!

[@LoveU_Allthetime]

Does the internet payable affect the FCFF?

[@kkok8131]

5:24 I think your reasoning for adding back interest * (1-t) is wrong. The FCFF are without capital structure consideration. Hence, you need to re-calculate the tax so it does not include the tax shield. So you're not actually adding back interest, you're calculating what NOPAT would be without a tax shield (full tax), and hence, no interest expense. Didn't hear you mention that