Enterprise Value, according to McKinsey
I noticed that in the McKinsey valuation book, enterprise value is defined as the present value of operations + the present value of non-operating assets.
That is a different definition from the one I learned in class, EV = Equity + Debt + MI - Excess Cash. I realize that they have the same conceptual meaning, preferring one over the other is really just a matter of whether you want to include the value of non-operating assets as a part of enterprise value.
Which one is more common in practice?
In IB? The latter.
Thanks
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