Multiples analysis: What is the enterprise value of Turnbull Corp.? Round to the nearest million dollars.

Question

Quizplus · Accepted Answer

The enterprise value can be calculated by subtracting the cash and cash equivalents from the market value of equity and adding the market value of debt. Using the information provided in the question, the market value of equity is $2,400 million, the market value of debt is $260 million, and the cash and cash equivalents are $873 million. Therefore, the enterprise value is:

EV = ($2,400 million + $260 million) - $873 million 
EV = $1,787 million

Rounding to the nearest million dollars gives us the answer of choice C, $1,787 million.

Multiples Analysis: What Is the Enterprise Value of Turnbull Corp