Citi Internship interview questions

1. Why do we look at both Enterprise Value and Equity Value? Enterprise Value represents the value of the company that is attributable to all investors; Equity Value only represents the portion available to shareholders (equity investors). You look at both because Equity Value is the number the public-at-large sees, while Enterprise Value represents its true value. 2. When looking at an acquisition of a company, do you pay more attention to Enterprise or Equity Value? Enterprise Value, because that’s how much an acquirer really “pays” and includes the often mandatory debt repayment. 3. What’s the formula for Enterprise Value? EV = Equity Value + Debt + Preferred Stock + Minority Interest - Cash (This formula does not tell the whole story and can get more complex – see the Advanced Questions. Most of the time you can get away with stating this formula in an interview, though).

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