Minority interest in valuation
Hi.
I'm preparing for an interview with a bb bank, and got some insider info that they will dig deep into minority interest and valuation.
My questions are; 1. When I do a dcf of for instance Google, how do I then handle the minority interest in company X? Is that reflected in the cash flow from Google, or do I have to add something? I understand that I have to add minotity interest to equity value (in addition to +debt-cash) to get to EV, but I'm not sure when I do the DCF. This additional stake should create value somehow, but I don't understand where.
- When I use the equity value found on the stock exchange to get to the EV, why do I have to add minority interest, shouldn't that additional value be reflected in the market value?
Thanks!
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