Question

How do you find OFCF using WACC after tax?

Answer #1

OFCF is the operating free cash flows. It is the cash flow which is free from all obligations. Generally, it is calculated as after deducting operating expenses and capital expenditure from the revenues.

Given the WACC after tax, we can calculate OFCF using value of the firm which consists both of equity and debt.

Lets say, V is the value of the firm

WACC is the weighted average cosy of capital after tax, then

V = OFCF / WACC

OFCF = V * WACC

So, it is value of the firm multiplied by average cost of capital after tax.

How do you find the PV of OFCF for each year from 1 to 4 using
WACC after tax, if year 1 OFCF is 4496, year 2 is 3510, year 3 is
475, year 4 is 1646 and WACC after tax is 0.0427623

The concept of after-tax Weighted Average Cost of Capital (WACC)
is a common issue when studying finance at all levels. The impact
of taxes, applicable to most forms of financing is a key component
of studies in the field of finance. The Assessment questions will
present the opportunity to assess and build upon your knowledge of
and ability to calculate the after-tax WACC and the cost of debt
and equity.
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items...

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debt-to-capital ratio implied in Mary’s WACC calculation? .
(ii) Using the information from part (d), what is the levered
beta used by Mary if the current risk-free rate is 2.7% and the
risk premium is 5.6%? How do you interpret...

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What is Rstock? and How do you find it? I' am trying to find it
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(1-TC)Rdebt + Wpreferred
stock . RpF + Wcommon stocks
. Rstocks
The very last one that say's Rstock I can't quite
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Given the following information for Cleen Power Co., find the
WACC. Assume the company's tax rate is 35%
Debt: 7,000 6% coupon bonds outstanding, $1,000 par value, 20
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Common Stock: 180,000 shares outstanding, selling for $58 per
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Bonds =
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based on the review of formulas, how do you calculate WACC?
Please provide an example.

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