environmental provisions, abandonment provisions, and so on since they also reflect claims on the company.

There are certain limitations and traps in using enterprise value. One of which can be a simplified aggregation of company's financial situation. One unit of additional debt may not be of same importance as additional one unit of missing cash.

It can be demonstrated that enterprise value depends on the probability of default (the rating) and works as a "negative growth rate" in the future.

Usage

*Because

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