duduct minorities interest from FCFF

CFA Level II Equities
#1

When I do valuation I use FCFF which calculate from NOPAT (net operating profit after tax). It mean minorities interest are included in FCFF. so when I discount FCFF to present, this present value still have a part of minorities interest. Please kindly help me the way to deduct the minorities interest to evaluate price for only equity shareholder

Many Many thanks for your helps!

#2

Use FCFE instead.

Also look:

https://www.analystforum.com/forums/cfa-forums/cfa-level-ii-forum/91355231

#3

NCI’s are not debt-holders of the entity, so FCFE valuation includes cash flows to both controlling and non-controlling shareholders.