Advanced Corporate Finance
Enterprise value (EV) is a measure of a company's total value, often used as a comprehensive alternative to market capitalization. It takes into account the company's equity value, debt, and cash reserves, providing a clearer picture of what it would cost to acquire the entire business. This metric is especially relevant in the context of divestitures and spin-offs, as it helps assess the value of a business unit when separating it from the parent company.
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