COMM 486 Lecture Notes - Lecture 6: Reformed Political League, Underwriting, Capital Expenditure
Document Summary
Comm 486q-101 sep - dec 2015 (updated 11 july 2015) The appendix to these notes shows how to convert these standard accounting statements into the sources of free cash flow (fcf) and the uses to which fcf can be put. Here we will deal with capital allocation decisions by building an analysis around ebitda (leading to free. This allows us to face that decision without dealing with capital structure decisions, as evidenced by interest expense (int), or dividend policy, seen in the decision involving div and del(re). For this series of examples, let"s use the following simplified firm : Suppose there are n0 = 100 equity shares outstanding, so the price per share (pps) is 1000/100 = per share. Now, assume the firm decides to distribute all the cash () by paying a dividend per share (dps) of. After the dividend, the firm"s balance sheet is:
