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Calculate Free Cash Flow for a Pure Equity Firm

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Free Cash Flow for a Pure Equity Firm

The following information is from the financial report of a pure equity company (one with no net debt). In millions of dollars.

Common shareholders' equity, December 31, 2005 174.8
Common dividends, paid December 2006 8.3
Issue of common shares on December 31, 2006 34.4
Common shareholders' equity, December 31, 2006 226.2

The firm had no share repurchases during 2006.

Calculate the firm's free cash flow for 2006.

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Solution Summary

This solution is comprised of a detailed explanation to calculate the firm's free cash flow for 2006.

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