Series 79 practice questionhardComparable Company Analysis - Minority Interest
When calculating enterprise value, which of the following must be ADDED to equity value if the company owns majority stakes in other businesses?
- ATreasury stock
- BPreferred dividends
- CMinority interest✓ Correct answer
- DOperating leases
Explanation
Why C — Minority interest
Minority interest is added to equity value to align numerator and denominator when using EV/EBITDA multiples if EBITDA includes earnings from majority-owned subsidiaries. The other items are not added in this context.
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