EV, Target Debt or Book?

Hi guys,

Got an assignment question that I am unsure of and would greatly appreciate any help. I have calculated EV and the question is asking for equity value. To derive to Equity Value, do I deduct book value of debt (taken from balance sheet or Deduct EV by target debt based on D/V ratio? And why? I know if market value of debt is know then I can find equity value by EV minus (Debt-Cash).

The target D/V is taken from average of 2 comps' D/Vs (The 2 comps are much bigger in size). I personally am more inclined to choose target due to the comps not being very comparable but WACC used to calculate the EV was calculated using the target D/V (unless I change the DV in WACC calculation to book D/V).

Thanks a lot!