To critically think about: The relevance of enterprise value to potential purchasers. Introduction: The enterprise value is the tool used to measure the value of the company. The enterprise value is the sum of market value of equity and debt minus the cash and cash equivalents held by the company. The following equation helps to calculate the enterprise value: Enterprise value = ( Market value of debt + Market value of equity ) − Cash and cash equivalents

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Chapter 2, Problem 11CRCT

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To critically think about: The relevance of enterprise value to potential purchasers.

Introduction:

The enterprise value is the tool used to measure the value of the company. The enterprise value is the sum of market value of equity and debt minus the cash and cash equivalents held by the company. The following equation helps to calculate the enterprise value:

Enterprise value=(Market value of debt+Market value of equity)−Cash and cash equivalents

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