medium · Investment Banking implied-share-price
If a company's share price increases by $5.00, which of the following statements regarding the valuation bridge is true?
- Enterprise Value increases more than Equity Value due to the dilutive effect of options.
- Equity Value increases, and Enterprise Value increases by the same absolute amount.
- Equity Value increases, and Enterprise Value decreases as the company's cost of equity falls.
- Equity Value increases, but Enterprise Value remains constant because it represents the operating business.
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