As a credit investor how do you calculate free cash flow?
The way I was thought to calculate FCF is the following 1.) EBIT 2.) EBIT (1-t) 3.) Add D&A, changes in NWC, minus CapEx = Unlevered FCF -Interest expenses =Levered FCF
Shouldn't credit investors take into account the interest tax shield and calculate FCF as follows 1.) EBIT 2.) Subtract Interest Expense 3.) EBT (1-T) 3.) Add D&A, changes in NWC, minus CapEx = Levered FCF +Interest =Unlevered FCF
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