Series 79 practice questionmediumValuation Methods
A company has 70 million basic shares at $26 per share, $150 million of debt, and $35 million of cash. Ignoring dilutive securities, what is enterprise value?
- A$1820 million
- B$1935 million✓ Correct answer
- C$1970 million
- D$1785 million
Explanation
Why B — $1935 million
$1935 million Enterprise value equals equity value plus debt plus other debt-like claims minus cash. Bankers use EV when comparing operating assets regardless of how those assets are financed.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 477+ Series 79 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Collection, Analysis & Evaluation of Data questions
- A company has 70 million basic shares at $18 per share, $110 million of debt, and $35 million of cash. Ignoring…
- A company has 70 million basic shares at $34 per share, $190 million of debt, and $35 million of cash. Ignoring…
- Which financing instrument generally sits highest in the capital structure and therefore has first claim on collateral…
- In a DCF, final-year unlevered free cash flow is $72 million, the perpetual growth rate is 3%, and WACC is 9%. Which…