Explain how dividends, buybacks, new share issues and shifts in leverage can change future FCFF and FCFE

Payout decisions move cash between the company and its shareholders but do not create free cash flow. Dividends, share repurchases and share issues are uses or sources of equity finance, so they leave FCFF and FCFE unchanged, because both are measured before any distribution to shareholders. Changes in leverage are different. New borrowing raises FCFE in the year it happens, through net borrowing, and lowers it in later years through higher interest and repayments. FCFF is largely unaffected by financing, because the tax benefit of debt is captured in the WACC rather than in the cash flow. The traps are treating a larger dividend or a buyback as lowering FCFE, and treating a one-off debt issue as a lasting increase in FCFE.