hard20 pts · first answer countsvaluationdcf

ESOP cost in a DCF

A tech company's cash flow statement adds back large ESOP expenses, and an analyst builds FCFF from that operating cash flow. What problem does this create?

A.ESOP cost is counted twice, so value is understatedB.Real employee cost is ignored, so value is overstatedC.There is no problem, since ESOP is non-cashD.The share count will be too low in the bridge

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ESOP cost in a DCF

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