A distressed company has 100m FV of senior secured loans trading at .70, 100M FV of bonds trading at .15, and MV of equity at $15M. What is that company's enterprise value?
Is it $215 or $100?
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Technically speaking you use market value. In practice you use face UNLESS the company is distressed, in which case you use market.
Thanks - makes sense! I just wanted to make sure it wasn't a trick question
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