Market Value of the Firm vs. Total Capital (Equity)

CFA Level II
#1

Can someone clarify the difference between the two? Here’s my take based on the CFAI text:

MV of Firm = MV of Debt + MV of Preferred + MV of Equity

Total Capital AKA MV of Invested Capital = MV of Debt + MV of Equity

I’m not sure if these are accurate representations. Maybe the difference is that Total Capital represents just the asset base of the firm while MV of Firm considers MV of stakeholders’ interests?

Would be nice if someone can confirm. Thanks.

As a side note, I’m not talking about Enterprise Value.

#2

http://www.investopedia.com/terms/e/enterprisevalue.asp#axzz2JhdoeSof

Read up

#3

LOL. Thanks, but I specifically said in my original post that I’m not talking about EV. I have no issues understanding EV… am trying to get clarification on MV of Firm vs Total Capital.

Thanks for the input, though.

#4

Bump…