Does EV include notes payables in addition to MV of long-term debt? My understanding is it does not. Truth or fake news?
i think it does because you’re trying to get the total value of the firm using its debt and equity
I’m glad you asked this question bc I was wondering as well. I believe the EV calculation does include the current portion of long term debt. See example 34 in reading 32 “Market Based Valuation: Price and Enterprise Multiples”. In that example debt includes both the long term and current portion of the long term.