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How does Enterprise Value change when Debt-to-Equity changes?
Hey guys! I've been confused lately by the way experts interpret the way Enterprise Value changes when Debt-to-Equity ratio changes. Some of them say that since D/E changes, tax shields are expected, so EV is going up. But if you think of it this way: D/E going up drives Beta(levered) to go up....
Sexnical Question Challenge, SB for winners
I have 14 credits, first few solid answers get SBs. Let's assume a parent company owns, say, 80% of a subsidiary. How is the parent's 80% majority interest accounted for within its enterprise value? Is it assumed that the market valuation of the parent's equity includes 80% (and only 80%) of the...
Questions on Total Debt and EV
Three questions: (1) What, specifically, do you include from Liabilities in calculating Total Debt, for the purpose of calculating EV ? Similarly, what specifically do you include in the calculation of Non-convertible debt? (2) How does Enterprise Value differ from Total Assets? I'd appreciate an...
Auto Manufacturers - EV calc
Howdy, I'm looking to calculate the industrial enterprise value for an auto manufacturer. Any thoughts on the best way to strip out the financial business? Thanks, redted
What's the EV on an All Equity, Private Company?
Might be a dumb question but.... I know EV = market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents but what is the market cap. of an all equity, private company that doesn't have # of shares and price to those shares? Thanks!
Why Subtract Cash When We Calculate Enterprise Value
Why do we subtract cash when calculating enterprise value? Shouldn't we be paying for the cash on hand too? If I am selling my company, why would I pay someone to take my excess cash? Before we answer this question lets make sure understand what enterprise value is. What is enterprise value (EV)?...
EV: Price or Value?
Guys, I can't help, but I always feel like price is confused with value when talking about "Net Debt" in the most common definition of Enterprise Value ( EV ). We talk about Enterprise Value , but in fact, we should say it's the Purchase Price , right?
Valuation: non-operating assets & operating liabilities
Hey guys, I am wondering about the correct theoretical explanation for two valuation-related issues and would be glad if someone could shed some light on these. 1) When going from Enterprise Value ( EV ) to equity value (EqV), we are adding non-operating assets and vice versa, we are subtracting...
Enterprise Value Question
When calculating enterprise value, do you include restricted cash? For my particular company, the restricted cash serves as cash collateral for its outstanding LCs
EV Formula for Banks ... ?
I have an interview coming up on monday for a FIG position. And I got some open questions about valuation: Obviously it is most appropriate to apply DDM or Equity Comps (such as PE , P/B) for a bank valuation. What is then the enterprise value of a bank? To my understanding the usage of equity...
I need help on EV/EBIDTA
I have a mock M&A modeling to do as part of an assignment in the recruiting process for an IB . It's a pretty basic accretion analysis. They provided the Excel spread sheet and I have to fill it out. From the outset, I have to enter a median EV /EBIDTA ratio (just have to find it on their scorecard)...
Adjust Enterprise Value for Pensions and Provisions
Hey guys I have a rather basic question about Enterprise Value calculations. I know EV calculations (EV = MarketCap - net debt) by heart and I have doen adjsutments for preffered stocks and minorities. However, during my internship I always had to adjust for pensions and provisions as well (add). I...
enterprise value- market/book value of debt
which is used? why? im assuming book value of debt. if a company buys another wont it really just pay for the equity + some premium and assume the debt without paying for it?> enterprise value is just a theoretical value used for ratios/ comps right?
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