Enterprise & Equity Value
A company (equity value $2,000m, debt $500m, cash $200m) owns 30% of a listed associate whose total market cap is $1,000m; the stake's book carrying value is $120m. Compute a clean operating EV.
Model answer
Value the stake at MARKET, not book: 30% x 1,000 = $300m. EV = 2,000 + 500 - 200 - 300 = $2,000m. Using the $120m equity-method carrying value instead would give $2,180m, overstating operating EV by…
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