medium · Investment Banking
In a scenario where a company's stock price increases from 20 to25, what happens to the Enterprise Value?
- It remains unchanged because debt and cash are not affected by the stock market.
- It decreases because the company's equity is now 'more expensive' relative to its debt.
- It increases by the change in share price multiplied by the fully diluted share count.
- It increases by exactly $5 million.
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