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Basic Question 6 of 7
Assume a 30% tax rate and a $100 increase in EBIT, this period's FCFF will ______ (increase/decrease) by ______ and FCFE will ______ (increase/decrease) by ______.
User Contributed Comments 1
| User | Comment |
|---|---|
| xiong | EBIT (1-t) = 100 * (1-30%)= 70 increase |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
explain the appropriate adjustments to net income, earnings before interest and taxes (EBIT), earnings before interest, taxes, depreciation, and amortization (EBITDA), and cash flow from operations (CFO) to calculate FCFF and FCFE;
calculate FCFF and FCFE;
CFA® 2025 Level II Curriculum, Volume 4, Module 22.