Fly Boy Corporation Is Expected Have EBIT of $800k This

question 95

Multiple Choice

Fly Boy Corporation is expected have EBIT of $800k this year.Fly Boy Corporation is in the 30% tax bracket, will report $52,000 in depreciation, will make $86,000 in capital expenditures, and will have a $16,000 increase in net working capital this year.What is Fly Boy's FCFF?

• A)510,000
• B)406,000
• C)542,000
• D)596,000

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Definitions:

Rights Offering

A method by which a company raises capital by offering existing shareholders the chance to buy additional shares at a discount.

Market Price

The current selling or buying price of a service or asset in the market.

New Equity Issue

The process through which a company raises capital by selling shares of stock to the public or private investors for the first time.

Shares Undervalued

A situation where stock shares are being sold for less than their intrinsic value, often due to market inefficiencies.