NISM Certifications · NISM-Series-XV: Research Analyst · Valuation Principles
A firm has enterprise value of Rs 5,000 crore, cash of Rs 400 crore, total debt of Rs 1,400 crore, and 50 crore shares outstanding. Assuming no other claims, the equity value per share is:
Equity value is enterprise value minus debt plus cash, which is Rs 4,000 crore, giving Rs 80 per share.
- ARs 92Correct
- BRs 100
- CRs 72
- DRs 108
Explanation
Equity value = EV - debt + cash = 5,000 - 1,400 + 400 = Rs 4,000 crore. Per share = 4,000/50 = Rs 80... recompute: 5,000-1,400=3,600; +400=4,000; 4,000/50=80. None of the listed options matches, so the key is flawed.
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