In the Wiley study videos, I came across a formula for EV (Enterprise Value) which is given below:
Market value of common equity + Market Value of Preferred Equity + Market Value of Debt + Non-Controlling Interest - Cash & Short term investments.
My question is, why are we adding Non-controlling interest? When we account for ‘Market Value of Common Equity’, aren’t we already accounting for all equity held by shareholders, whether controlling or not controlling?
Is this a mistake in the formula or have I misunderstood somewhere?
Thank you and god bless