Question

If in 2009 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share, then what is Luther's Enterprise Value

Answer 1

Answer:

163.2 million

Explanation:

The enterprise value is calculated by first obtaining the market value of the equity which is done by multiplying the number of outstanding shares by the value that each individual share is currently trading at. Then you add all existing debt to the market value of the equity, and finally you subtract all liquid cash available. Since neither debt or cash is provided as values in this question we can assume there is none and simply calculate the market value of the equity as the Enterprise value...

10.2 * 16 = 163.2 million