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Private Equity
~60s
Valuation Fundamentals
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Enterprise Value
When moving from
Enterprise Value
to
Equity Value
, why do you typically
subtract cash
?
A
Because cash is already included in EBITDA
B
Because cash is non-operating and reduces net debt, increasing what equity holders effectively receive
C
Because subtracting cash increases leverage ratios
D
Because cash increases EV since it is an asset on the balance sheet
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