Explanation:
Free cash flow to equity (FCFE) is calculated as follows: FCFE = Cash Flow from Operations (CFO) - Fixed Capital Investment (FCInv) + Net Borrowing. This formula reflects the cash available to equity holders after accounting for investments in fixed capital and net borrowing. Option B correctly represents this calculation, while Options A and C incorrectly adjust for net borrowing or fixed capital investment.
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Free cash flow to equity (FCFE) is derived from cash flow from operations by:
A
Subtracting fixed capital investment and net borrowing.
B
Subtracting fixed capital investment and adding net borrowing.
C
Adding fixed capital investment and subtracting net borrowing.
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