Home Work Set 1.

1.Recall that free cash flow (FCF) is the amount of cash that is available for distribution to all investors, including shareholders and debtholders. List at least 4 uses of FCF:

2.Explain the weighted average cost of capital(WACC) and how it interacts with free cash flow(FCF) to determine a firm’s value.

3.(2-12) Free Cash Flows,(Refer to end of chapter problems, Problem 2-12 from the text page 94).

Using Rhodes Corporation’s financial statements (shown after Part f), answer the following questions.