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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 just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu
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.