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?

  1. Enterprise Value cannot be determined without a full professional appraisal of the underlying physical assets.
  2. Enterprise Value can still be positive and significant because it is based on the market value of equity, not book value.
  3. Enterprise Value must also be negative whenever book equity itself turns negative on the company's reported balance sheet.
  4. Enterprise Value simply equals the company's reported Net Debt figure exactly in this particular hypothetical scenario described.

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