medium · Investment Banking implied-share-price
A company has a $200 million 'Noncontrolling Interest' (NCI) balance.
Why is this added in the Enterprise Value calculation?
- Because it represents a debt-like claim owed to the bank.
- To inflate Enterprise Value and make the company appear larger to investors.
- To account for cash the subsidiary holds on its own separate balance sheet.
- Because 100% of the subsidiary's EBITDA is included in the denominator.
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