Question: Why do we deduct the net debt from enterprise value to determine equity value? A)Enterprise value includes the value attributable to holders of both debt

Why do we deduct the net debt from enterprise value to determine equity value?

A)Enterprise value includes the value attributable to holders of both debt and equity instruments of the company.

B)N/A - net debt should be added in determining equity value.

C)N/A - this adjustment is not required in the context of Amazon.

D)Equity value needs to include the pro-rata value attributable to debt holders.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!