Enterprise & Equity Value
A company has a $500m revolving credit facility with nothing drawn. Does any of it go into the EV bridge?
Model answer
No. Only DRAWN borrowings are debt - an undrawn revolver is a commitment from lenders, not an obligation of the company, so it adds nothing to the bridge. It is a liquidity resource, relevant for…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 1,500+ — or go Pro for unlimited reps.
More from Enterprise & Equity Value
- What's the difference between enterprise value and equity value?
- Why do you subtract cash when going from equity value to enterprise value?
- Why is enterprise value capital-structure neutral but equity value is not?
- A company issues $100 of new debt and holds the cash on its balance sheet. What happens to EV and equity value?
- Which valuation multiples pair with enterprise value vs. equity value, and why?
- How do you calculate fully diluted shares?