CFA Practice Question

There are 266 practice questions for this study session.

CFA Practice Question

What is an issuer's enterprise value?

A. Market value of total equity + market value of total debt
B. Market value of (common stock + preferred stock + of debt) - (cash and investments)
C. Market value of total equity - market value of total debt
Correct Answer: B

Enterprise value (EV) is total company value minus the value of cash and investments. It shows how much a company is worth because an acquirer would have to pay off/assume the debt and receive the cash/investment portion.

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