Series 79 practice questionmediumEnterprise Value vs Equity Value
Which of the following is subtracted from enterprise value to arrive at equity value per share?
- AInterest expense
- BOperating expenses
- CDeferred tax asset
- DNet debt and other non-equity claims✓ Correct answer
Explanation
Why D — Net debt and other non-equity claims
To arrive at equity value per share from enterprise value, you subtract net debt and other non-equity claims. Interest expense and operating expenses are income statement items, not balance sheet adjustments. Deferred tax assets are not subtracted in this calculation.
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