Valuation Question
Suppose a company has EV of 10M, Debt of 2M and cash of 1M. day 1 it generates 1M in cash. what is the EV on day 2?
I thought because balance sheet would roughly shake out to 1M addition in cash and 1M addition to shareholder equity (via retaind earnings) and that would translate to equity value increasing by 1M, Ev is unchanged. But I realize some ppl are saying EqV does not change, and EV changes because of increase in cash. Am I incorrect in thinking that in this simplified scenario, that the cash generated on day 1 does EqV? There are little assumptions in the question
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