easy · Investment Banking implied-share-price
For a company with negative Shareholders' Equity on its balance sheet, which of the following is true regarding its Enterprise Value?
- Enterprise Value cannot be determined without a full professional appraisal of the underlying physical assets.
- Enterprise Value can still be positive and significant because it is based on the market value of equity, not book value.
- Enterprise Value must also be negative whenever book equity itself turns negative on the company's reported balance sheet.
- Enterprise Value simply equals the company's reported Net Debt figure exactly in this particular hypothetical scenario described.
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