Question
Your analyst is valuing an equity stake in a company. She estimates that, due to rising interest rates leading to a higher WACC, the company
Your analyst is valuing an equity stake in a company. She estimates that, due to rising interest rates leading to a higher WACC, the company Enterprise Value has fallen to $100 million. She notes that the Book Debt of the company is $95 million and therefore estimates that the company's equity is only worth $5 Million. Do you agree with her? What would you ask her to do if you wanted to get a more accurate estimate of the equity value?
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Intermediate Accounting
Authors: Kin Lo, George Fisher
3rd Edition Vol. 1
133865940, 133865943, 978-7300071374
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