pearkenneth's valuation is a little muddleheaded. to arrive at...

  1. 75 Posts.
    pear

    kenneth's valuation is a little muddleheaded. to arrive at enterprise value you start with the market cap then add debt, minority interests and preferred shares, and take off cash and cash equivalents.

    Investopedia explains Enterprise Value - EV
    "Think of enterprise value as the theoretical takeover price. In the event of a buyout, an acquirer would have to take on the company's debt, but would pocket its cash. EV differs significantly from simple market capitalization in several ways, and many consider it to be a more accurate representation of a firm's value. The value of a firm's debt, for example, would need to be paid by the buyer when taking over a company, thus EV provides a much more accurate takeover valuation because it includes debt in its value calculation"

 
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