Comments on: Current Market Value of Firm? http://FutureFirm.com/blog/current-market-value-of-firm/ FutureFirm.com Tue, 22 May 2012 12:44:09 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: csanda http://FutureFirm.com/blog/current-market-value-of-firm/comment-page-1/#comment-407 csanda Thu, 25 Jun 2009 05:22:26 +0000 http://FutureFirm.com/blog/current-market-value-of-firm/#comment-407 "Market value of firm" is usually called "Enterprise value". Enterprise value is Market Cap + Market value of Debt and other Interest Bearing Securities + Market value of other stakeholders (eg, minority interests, zero-coupon CBs, preferred shares) - cash. You're on the right path. The market value of debt is not necessarily book value, but for all companies except those at risk of default - it's pretty close. You can see that teh future value of $1 invested is, even in bad years, only down 15%. This is telling me that they're probably not a default risk (especially since they are a positive FCF spinner). “Market value of firm” is usually called “Enterprise value”. Enterprise value is Market Cap + Market value of Debt and other Interest Bearing Securities + Market value of other stakeholders (eg, minority interests, zero-coupon CBs, preferred shares) – cash.

You’re on the right path. The market value of debt is not necessarily book value, but for all companies except those at risk of default – it’s pretty close. You can see that teh future value of $1 invested is, even in bad years, only down 15%. This is telling me that they’re probably not a default risk (especially since they are a positive FCF spinner).

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