if MVequity=100 and cash =20, how much should I pay for this company?
The imply EV=MVequity - Cash =80
I dont get the concept of why I would be paying $80 and I would be receiving stocks worth 100 and Cash worth of 20.
When there is debt, I would understand the cash can be used to pay down debt. However, what is the rationale when there is no debt?