Equilest

MARCH 28, 2025

This pivotal metric is typically calculated by summing the market capitalization and net debt of the organization. Understanding equity value is essential as it provides a clear indication of what shareholders truly own in the business, reflecting the residual claim on assets once all debts and obligations are settled.

Equity 40

Equity Net Debt Enterprise Value Capital Structure 40

Valutico

SEPTEMBER 22, 2023

This is accomplished through methods like Comparable Company Analysis, Precedent Transaction Analysis, and Market Capitalization, which collectively offer insights into the company’s value within the context of the broader market landscape. A lower EV/EBIT ratio indicates a potentially better value for investors.

Discounted Cash Flow 52

Discounted Cash Flow Intangible Assets Book Value Asset-based Approach 52

Musings on Markets

FEBRUARY 27, 2023

The second is that borrowing money will increase perceived default risk, and if the company is rated, lower ratings, and that too is true, but borrowing money at a BBB rating, with the tax benefit incorporated, might still yield a lower cost of funding that staying at a AA rating, with no debt in use. Do companies optimize financing mix?

Equity 52

Equity EBITDA Start-ups Net Debt 52

Musings on Markets

FEBRUARY 23, 2025

The debt equity trade off, in frictional terms, is in the picture below: As you look through these trade offs, real or frictional, you are probably wondering how you would put them into practice, with a real company, when you are asked to estimate how much it should be borrow, with more specificity.

Equity 75

Equity EBITDA Risk Premium Gross Debt 75