A company has $500 EV, $100 of secured debt, a $50 undrawn revolver, $50 of cash, $50 of investments accounted for on an equity-method basis, and a $100 unfunded pension. What is the equity value?

Question

IBPrep · Accepted Answer

Bridge from EV to equity value: Equity = EV - secured debt - unfunded pension + cash + non-operating investments.

$500 - $100 - $100 + $50 + $50 = $400 equity value.

A company has $500 EV, $100 of secured debt, a $50 undrawn revolver, $50 of cash, $50 of investments accounted for on an equity-method basis, and a $100 unfunded pension. What is the equity value?

Answer

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