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RipplingBrook Mining Co. had operating cashflow equal to $50,000. Depreciation expense during the year was $7,500....

  1. RipplingBrook Mining Co. had operating cashflow equal to $50,000. Depreciation expense during the year was $7,500. Interest expense was $3,000 and the company paid down $3,500 in long term debt. The company spent $20,000 on new equipment and had an increase in working capital of $1,000. What was the cash flow to stockholders?

Solutions

Expert Solution

Cash flow to stockholders is the free cash flow to equity which is calculated using following equation

Cash flow to stockholders = Operating cash flow - Capital expenditure - Debt repayment

= $50000 - $20000 - $3500

= $30000 - $3500

= $26500

jeff jeffy answered 2 years ago
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