Accounting for NCI in Levered Free Cash Flow DCF
Say the company has non-controlling interests. I want to estimate Equity Value through discounting its levered free cash flows. LFCF= Net Income + Non-cash changes in assets and liabilities + D&A - Cap. Ex. - Debt repayments. However, since the financial statements of the parent is fully consolidated with the subsidiary, the non-cash changes in assets and liabilities also reflect the portion of NCI. In other words, the LFCF calculated here does not accurately reflect the value to equity holders only. How do we adjust for that?
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