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In firm valuation, do you think a firm's capital struture will affect its calcuated free cash...

In firm valuation, do you think a firm's capital struture will affect its calcuated free cash flows? Explain why.

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The capital structure will certainly matter for calculation of free cash flows of the firm. Free cash flows is the cash that a company generates after paying its operating expenses and capital expenditures i.e. the payments to shareholders and debt holders. Having higher leverage will certainly increase the overall value of the firm since the cost of capital is lesser in this case. Also, the free cash flows if a firm has higher debt is reduced due to debt obligations associated with maintaining the debt capital.

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