Hi everyone,

I got a question which made me think: "There are two identical firms A and B. A owns 10% treasury shares, while B doesn’t. Given that:

- EV (Enterprise Value) of A is equal to EV of B
- EV of A is lower than EV of B
- EV of B is lower than EV of A"

In my opionion, treasure shares do not affect EV and so I would answer that EV of A is equal to EV of B, given that the two firms are identical (same revenues,… and same FCFO).

However, I am still uncertain. How would you interpret this question?

Thank you in advance!