Free Cash Flow to Equity
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Free Cash Flow to Equity
The cash that a company has on hand after all debt service and expenses have been paid and reinvestment has been made. The free cash flow to equity is calculated thusly:
FCFE = Net income + newly borrowed debt - capital expenditures - change in net working capital - debt service.
FCFE is a measure of a company's value and is considered an alternative to the dividend discount model.
FCFE = Net income + newly borrowed debt - capital expenditures - change in net working capital - debt service.
FCFE is a measure of a company's value and is considered an alternative to the dividend discount model.