easy · Investment Banking
When a company owns a non-controlling stake (20% to 50%) in another company, how is this 'Equity Investment' usually treated in the Enterprise Value bridge?
- It is added to Equity Value because it represents an additional asset the company owns.
- It is subtracted from Equity Value because its financial results are not consolidated into the company's EBITDA.
- It is treated exactly like Cash and added back to calculate the total cost of acquisition.
- It is ignored as it is a non-cash item that only affects the balance sheet, not the valuation multiples.
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