Series 79 practice questionmediumComparable Company Analysis - EV Calculation
A company has equity value of $200 million, total debt of $50 million, and cash of $20 million. What is its enterprise value?
- A$170 million
- B$250 million
- C$230 million✓ Correct answer
- D$270 million
Explanation
Why C — $230 million
Enterprise value = equity value + debt - cash = $200M + $50M - $20M = $230M. Option B forgets to subtract cash, Option C incorrectly calculates, and D is a duplicate of A.
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