Firm valuation Flashcards
(5 cards)
1
Q
Q: How do you value an unlevered firm?
A
Vu = FCF/Ru
2
Q
How do you determine the value of a levered firm?
A
VL =Vu + PV (Tax Shield)
3
Q
How does distress affect levered firm value?
A
VL = Vu + PV(Tax Shield) − PV (Distress)
4
Q
How do you calculate equity value from enterprise value
A
Equity = Enterprise Value − Net Debt
5
Q
How do you calculate enterprise value from equity value?
A
EV = Equity Value + Net Debt
