Aswath Damodaran 496
II. Estimating Cash Flows
Cash Flows
To Equity To Firm
The Strict View
Dividends +
Stock Buybacks
The Broader View
Net Income
- Net Cap Ex (1-Debt Ratio)
- Chg WC (1 - Debt Ratio)
= Free Cashflow to Equity
EBIT (1-t)
- ( Cap Ex - Depreciation)
- Change in Working Capital
= Free Cashflow to Firm