Equity: Market value of the firm and EV only, difficulty, investment, equity, market

pogo

I have difficulty to connect some concept: Readh 44, page 569, 13.B
does market value of the firm only refer to market value of equity?
EV=MV of equity + MV of debt - cash and investment?
I thought value of the firm more refer to total asset of the firm.

dyga

your question is unclear. Enterprise value, as you correctly state it, is mkt val equity + mkt val debt minus cash. You don’t include cash b/c we only want operating assets, not just cash sitting at the bank