An analyst following barlow energy has compiled the following information in preparation for additional analysis she has to include in a report she has been asked to produce (data is in hundreds of millions of $): preferred share dividends: $14 net income available to common: $125 investment in working capital: $30 investment in fixed capital: $100 net new borrowing: $40 depreciation: $50 tax rate: 40%. market value of debt is $600 and interest on this debt is 7.5% the current fcfe for barlow energy is closest to:

FCFE: 99

Explanation:

FCFE: cash flow from operation - CAPEX + borrowing

we calcualte the cash flwo form operation using the indirect method:

net income - preferred dividends = available for common stock

income = 125  + 14 = 139

net income                                       139

depreciation expense                      50

change in working capital               (30)

          cash flow from operation: 159

CAPEX will be the long term assets investment

investment on fixed capital 100

                          CAPEX       100

net borrowing                        40

159 -100 + 40 = 99