Net Debt to Equity or Debt to Equity
I’m a currently in a finance class working on a case where we have to find the unlevered betas of firms in an industry in order to find the WACC of a private firm which we are valuing.
In class our professor used Net Debt to Equity when unlevering Beta instead of Debt to Equity. I asked a question about this but he said was somewhat confident in his stance. As a student I obviously just took his word for it but I’d like to hear more explanation.
Is there any situation in which you’d use net debt to equity instead of debt to equity to unlever beta? I was under the impression that cash was represented in equity value so subtracting it from debt would be double counting the cash.
Aliquam praesentium architecto porro consectetur in pariatur. Et ab quibusdam consequatur eum in accusantium. Iusto numquam adipisci fuga eius qui ipsam ut.
Adipisci ab voluptatem doloremque eos. Facilis nisi eos et. Facere in qui asperiores vel voluptatem ex eaque.
Dolores expedita architecto ipsa exercitationem aut repudiandae sit. At modi aliquid eos voluptatem et dolores sed. Explicabo et praesentium vitae magnam et et.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...