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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (13284)	12/6/2012 5:02:38 PM
From: Bridge Player	Respond to of 34328

I have often been bemused by the term "enterprise value". It sounds like that's what the whole company is worth, right? The value of the enterprise. Like maybe, "private market value". So you compare current market price with "enterprise value", and if it's a big discount, the stock is a "value", right? Hardly. What bugs me is that the bigger the long term debt, the larger the "enterprise value". Which hardly sounds like a good way to value a company. For example, take any company, and just make believe that the debt is increased by, let's say, 30 billion. The enterprise value will be increased by that much, too. Is the company really worth any more? In reality, the company would be staggering under that debt load, and likely to go bankrupt. I don't like the term.