Explain FCFF, FCFE, DCF and Enterprise Value and how it is calculated? Explain Growth and Maintenance Capex

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FCFF, FCFE, DCF, and Enterprise Value are key financial metrics used in valuation. Growth and Maintenance Capex are important factors in calculating these metrics.

FCFF (Free Cash Flow to Firm) is the cash flow available to all providers of capital, calculated as Operating Cash Flow - Capital Expenditures + Interest Expense * (1 - Tax Rate)
FCFE (Free Cash Flow to Equity) is the cash flow available to equity investors, calculated as Net Income + Depreciation & Amortization - Change in Working Capital - Capital Expenditures
DCF (Discounted Cash Flow) is a valuation method used to estimate the value of an investment based on its future cash flows, discounted back to present value using a discount rate
Enterprise Value is the total value of a company's equity and debt, calculated as Market Capitalization + Total Debt - Cash & Cash Equivalents
Growth Capex is capital expenditures used to expand a company's operations and increase its future cash flows, while Maintenance Capex is capital expenditures required to maintain a company's existing operations
Example: If a company has Operating Cash Flow of $100, Capital Expenditures of $20, and Interest Expense of $10 with a tax rate of 30%, FCFF would be $85

Explain FCFF, FCFE, DCF and Enterprise Value and how it is calculated? Explain Growth and Maintenance Capex

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