tobeornottobe

one of the question in mock exam, it use FCFF to get the total value of the firm, then deduct AP, notes payable , long term debt to get the value of equity. ......
is that right? Thanks.


Spanishesk Wrote:
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> Not sure im following you.....EV (enterprise
> value) = Value of Equity + Value Pref Equity +
> Value Debt - Cash and equivalents -
> investments.....
>
> FCFF gives you total value of a company. If you
> want to find the equity value but you used FCFF,
> you need to subtract the market value of debt, not
> accounts payable. That will give you the value of
> equity.