medium · Investment Banking implied-share-price
A company has $500.0 million in debt and $100.0 million in cash. Its share price is $10.00 with 100.0 million shares.
If the company takes its $100.0 million in cash and pays off $100.0 million of debt, what happens to the Enterprise Value?
- Enterprise Value increases because the company is now less risky
- Enterprise Value decreases because the cash balance is now zero
- Enterprise Value remains unchanged
- Enterprise Value decreases because the company has less debt
Sign up free to see the explanation and track your rank →
More Investment Banking implied-share-price practice
- If a company's Net Debt is negative, what is the relationship between its Equity Value and
- A company has a $200 million 'Noncontrolling Interest' (NCI)… — Why is this added in the E
- When calculating Enterprise Value using the if-converted method, how is this bond treated?
- A company has $100 million of Preferred Stock with a 6% divi… — When calculating Enterpris
- What is its Enterprise Value?
- A firm has $10.0 million options outstanding with a strike p… — What is the impact of thes
- Using the Treasury Stock Method (TSM), how many net new shares are added to the diluted sh
- Which of the following would cause a company's Enterprise Value to remain unchanged while