Lauryn’s Doll Co. had EBIT last year of $49 million, which is net of a depreciation...

Lauryn’s Doll Co. had EBIT last year of $49 million, which is net of a depreciation expense of $4.9 million. In addition, Lauryn’s made $4.5 million in capital expenditures and increased net working capital by $2.2 million. Assume that Lauryn’s has a reported equity beta of 1.7, a debt-to-equity ratio of .7, and a tax rate of 21 percent. What is Lauryn’s FCF for the year?(Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

Expert Solution

FCF = EBIT(1-t) + Depreciation - capital expenditure - increase in net working capital

FCF = 49*(1-0.21) + 4.9 - 4.5 -2.2 = 36.91

Answer : 36.91 million [Thumbs up please]

jeff jeffy answered 2 years ago

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Lauryn’s Doll Co. had EBIT last year of $49 million, which is net of a depreciation...

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