medium · Principles of Finance
In the context of WACC, what does 'Total Capitalization' (V) represent when using market value weights?
- The sum of the market value of equity and the market value of interest-bearing debt.
- The Enterprise Value of the firm, which always excludes non-operating cash.
- The total historical amount of capital ever raised through debt and equity issuances.
- Total Assets minus Total Liabilities, as reported on the current year's balance sheet.
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