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What is the MAIN difference between Levered Free Cash Flow and Unlevered Free Cash Flow in a DCF analysis?

What is the MAIN difference between Levered Free Cash Flow and Unlevered Free Cash Flow in a DCF analysis?

A.Levered FCF includes the effects of cash and debt, while Unlevered FCF excludes the effects of financing decisions.

B.Unlike Levered FCF, Unlevered FCF is pre-tax because the formula begins with Operating Income (or EBIT).

C.Unlike Unlevered FCF, with Levered FCF you do not add back Depreciation or other non-cash charges because the formula starts with Net Income.

D.In a DCF, using Levered FCF results in Enterprise Value while using Unlevered FCF for the calculations results in Equity Value

Top Answer

Option A :- Levered FCF includes the effects of... View the full answer

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