hard · Investment Banking implied-share-price
A firm has $3,000.0 million Market Capitalization, $800.0 million Debt, $200.0 million Cash, and $50.0 million NCI.
If the company's EBITDA includes its share of income from a 25% stake in an unconsolidated JV, but the JV itself has $100.0 million of debt not on the parent's balance sheet, how might an analyst adjust the EV?
- Ignore the JV debt entirely since it is 'off-balance sheet' for the parent.
- Subtract the parent's proportional 25% share of the JV's debt from Enterprise Value.
- Add the entire $100.0 million of JV debt directly onto the parent's Enterprise Value figure.
- Add the parent's proportional share of the JV debt ($25.0 million) to Enterprise Value.
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