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

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?

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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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