M&A Boot Camp booklet 2023 - Flipbook - Page 11
Equity Value vs. Enterprise Value
— Assume Target has 100 million outstanding shares
(and no other equity securities)
— Assume Target’s share price is $50
• Target’s equity value (value of outstanding equity securities)
= $5 billion
— Assume Target has $3 billion of outstanding debt
— Assume Target has $500 million of cash and cash equivalents
• Target’s enterprise value (equity val. + debt - cash) = $7.5 billion