Enterprise value is based on the:
A)market value of interest-bearing debt plus the market value of equity minus cash.
B)book values of debt and assets,other than cash.
C)market value of equity plus the book value of total debt minus cash.
D)book value of debt plus the market value of equity.
E)book values of debt and equity less cash.

Question

Quizplus · Accepted Answer

Enterprise value (EV) is the total value of a company's market capitalization, debt, and cash. So, the correct formula for calculating enterprise value is the market value of interest-bearing debt plus the market value of equity minus cash. Option A provides the correct formula, while the other options are either based on book value or do not include the market value of debt.

Enterprise Value Is Based on The