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6. Which of the following statements are correct with respect to the market value of equity...

6. Which of the following statements are correct with respect to the market value of equity (MVE)? There may be more than one correct answer to this question.

a)      MVE is equal to the sum between enterprise value and net financial liabilities

b)      MVE is the same as shareholders’ funds in a company’s balance sheet

c)      MVE can be calculated as the company’s share price multiplied by the number of shares outstanding

d)      MVE is equal to enterprise value less net financial liabilities

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Answer #1

The correct ones are:

c)      MVE can be calculated as the company’s share price multiplied by the number of shares outstanding

d)      MVE is equal to enterprise value less net financial liabilities

Market value of equity = Total value - Value of Debt

or price per share*number of shares

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