Consider the following equation for the question(s)below:
E + D = U = A
-The E in the equation above represents
A)the market value of the firm's assets.
B)the value of the firm's unlevered equity.
C)the value of the firm's debt.
D)the value of the firm's equity.

Question

Quizplus · Accepted Answer

E represents the value of the firm's equity, and the equation shows that the sum of equity and debt equals the unlevered value of the firm (U) which is also equal to the value of the assets (A).

Consider the Following Equation for the Question(s)below