Indirect impact of leverage on FCFF
In theory FCFF is not affected by debt and interest, however I'm struggling to find a way to fix this on a project finance model. There is a advisory fee upon debt, that I understand would be reported as financial expense, thereby affecting the FCFF accordingly to the leverage (higher leverage, higher debt draws and higher financial expense). Additonally, the interest will impact my effective tax rate and change in deferred tax assets, thereby affecting the FCFF as well. Am I missing something?
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