What's the formula for enterprise value?

CFA.Rhythm · June 4, 2010, 4:47pm

I’m sorry to trouble you, but I’ve had troubles with EV enterprise value. Can someone please help me with the formula?

bpdulog · June 4, 2010, 4:49pm

MV Debt + MV Equity - Cash - Investments

CFA.Rhythm · June 4, 2010, 4:54pm

thanks bp-you’re gonna kill it tomorrow!

justinkc · June 4, 2010, 5:05pm

Can you remind me where EV is used again?

s302632 · June 4, 2010, 5:09pm

usually price multiple like EBITDA/EV or is it EV/EBITDA

justinkc · June 4, 2010, 5:12pm

thanks

adee1031 · June 4, 2010, 5:31pm

It is for overall company rather than just common stock assuming debt and preferred stock are efficiently priced. It is EV/EBITDA EV= MV of equity+ MV of pref stock + MV of debt - cash & investment