Explanation

FCFE Formula: FCFE = Net Income + Depreciation - FCInv - WCInv + Net Borrowing

Impact Analysis:

• Option A (Issuing new shares): This is a financing activity that doesn't directly affect FCFE calculation. It affects the equity base but not the FCFE amount itself.

• Option B (Borrowing from a bank): This directly impacts FCFE because net borrowing is a component of the FCFE formula. Increased borrowing increases FCFE, while debt repayment decreases FCFE.

• Option C (Paying common share dividends): Dividend payments are a use of FCFE, not a determinant of FCFE. They represent the distribution of FCFE rather than affecting its calculation.

Therefore, borrowing from a bank (net borrowing) is the action that most directly impacts future FCFE calculations.