I have a company with zero interest bearing debt and 10M in cash.

Since there is no debt: Am I correct in assuming that the Free cash flows to equity (FCFE) and Free cash flows to the firm (FCFF) will be the same?

Am I correct in assuming that the market value of the security will be

NPV + Cash

Regardless of if I take the FCFF or FCFE route?

  • $\begingroup$ Sorry this is quite basic and not really about quantitative finance to be considered on-topic here, see help center. $\endgroup$
    – SRKX
    Nov 8, 2016 at 6:52
  • $\begingroup$ If the answer is that basic, perhaps you can provide the answer $\endgroup$
    – Matthias
    Nov 8, 2016 at 19:13

1 Answer 1


I think you're right regarding FCFE and FCFF, but I'm not sure you can say what is the market value of the equity, since the market might price in other factors of the firm business nature (macro economic factors for example), besides NPV and cash.


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