Series 79 practice questionmediumFinancial due diligence – debt-like items
During financial due diligence, which of the following would MOST likely be classified as a 'debt-like' item that should be included in enterprise value calculations?
- AUnfunded pension liabilities✓ Correct answer
- BPreferred stock dividends
- COperating lease expense
- DAccounts receivable
Explanation
Why A — Unfunded pension liabilities
Unfunded pension liabilities represent future cash obligations similar to debt and are included in enterprise value adjustments. Preferred dividends are not a balance sheet liability, operating leases may be adjusted depending on accounting treatment, and accounts receivable are an asset.
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