medium · Investment Banking valuation-core

In a scenario where a company's stock price increases from 20 to25, what happens to the Enterprise Value?

1. It remains unchanged because debt and cash are not affected by the stock market.
2. It decreases because the company's equity is now 'more expensive' relative to its debt.
3. It increases by the change in share price multiplied by the fully diluted share count.
4. It increases by exactly $5 million.

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