Market
Value of Equity and Total Value of Company
Market Value of equity can be calculated from the Total
value of entity and market value of debt. Formula for calculating market value
of equity is
Ve= Vt-Vd
Ve= Market Value of equity
Vt= Total Market Value
Vd= Market Value of debt
Market
Value of Equity Example
Company total market value
is 250 million, the market value of debt is 50 million, and then market value
of equity can be calculated as under
Ve=
Vt-Vd
Ve=
250-50
Ve=
200 (Market value of equity)
