Equity Value Definition & Application Wiki

Equity Value Definition & Application Wiki

Last Updated by WikiWealth

Short Definition

Total value of the business after taking out the amount owed to debt holders. Wikiwealth uses a free cash flow to the firm approach in their valuations to derive the value of the entire operating entity. Interest-bearing debt is subtracted from that value to derive the value to equity holders (net present value of free cash flow).

Long Definition

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Source: http://en.wikipedia.org/wiki/Equity_(capital)#Equity_capital