Enterprise value value

CFA4Techie

I know the formula, EV = MV of ttl SE + MV of debt - cash and short-term investment

But with debt, we should include both LTD and current portion of LTD (including notes payable), right?

This year's sample exam 1, Q22, notes payable is not included in EV calc, is that right?

Also, Q20, when use CCM method to calc equity value, I only deduct notes payable and LTD from the total firm value, while the answer also deduct AP? what's the deal?

Thanks all!

MiniMe7

help please...

mengxu

should include current portion of LTD as far as i know.

jarobi04

EV = SE + LTD + STD + MI + Preferred - Cash

redskins44

Thank you, so i ignore what does sample answers say

profil

Yes, ALL debt... and Chuckrox8 is correct on accounts of MI and Preferred...

ninja1024

Account payable shouldn't be included, right? We don't need to deduct that from firm value to get equity value

senlinlang

Payables is not considered debt.

firat

I believe you should deduct long term debt for CCM and for EV the formula says MV of debt but it doesnt specify.. i guess we're gona enjoy doing trial and error on the exam.

that's just stupid.

flyinggirl

the question wanted Value of Equity extracted from EV/EBITDA (adjusted)