Series 79 practice questioneasyEnterprise Value vs Equity Value
Which item is included in the calculation of enterprise value, but not equity value?
- APrepaid expenses
- BMinority interest✓ Correct answer
- CTrade payables
- DAccounts receivable
Explanation
Why B — Minority interest
Enterprise value includes minority interest because EBITDA often includes 100% of consolidated subsidiaries. Overlooking this can misalign enterprise value with operational profits.
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