negative fcfe

[vaibhav aggarwal]

Guys
Can FCFE be negative ?

[MENG KAI YEE]

If CFO is very low and high interest paid to debtors and high fixed capital investments needed, then think possible that FCFE becomes negative.

Rgds

On Fri, Jul 5, 2013 at 6:35 PM, vaibhav aggarwal <vaibh...@gmail.com> wrote:

Guys
Can FCFE be negative ?

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[CFA Prep]

for high growth companies, as they have high Capex requirements, mite require high investment in working capital, and highly levereged- in these cases, FCFE can be less than 0, we use FCFF to calculate the firm value, and subtract the market value of the debt to find out the Value of Equity.