In a M & M world, the equity value is the present value
of the Free Cash Flow FCF at the Weighted Average Cost
of Capital WACC minus debt and it should be identical to
the present value of the CFE (cash flow to equity)
discounted at the cost of equity capital, e. In this
paper the relationship between firm value calculated
through the FCF and the CFE is examined. Several
approaches to the firm value calculations are presented.
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