Enterprise & Equity Value
A company's market cap is $800m, it has $300m of debt, $100m of cash, and $50m of preferred stock. What is its enterprise value?
Model answer
EV = equity value + debt + preferred - cash = 800 + 300 + 50 - 100 = $1,050m. Net debt here is 300 - 100 = $200m, plus $50m preferred, added to the $800m market cap. Always show the bridge explicitly…
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More from Enterprise & Equity Value
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