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Question
For a firm having common and preferred equity as well as debt, common equity value can be estimated in which of the following ways?
a. By subtracting the book value of debt and preferred equity from the enterprise value of the firm
b. By subtracting the market value of debt from the enterprise value of the firm
c. By subtracting the market value of debt and the market value of preferred equity from the enterprise value of the firm
d. By adding the market value of debt and preferred equity to the enterprise value of the firm
e. By adding the market value of debt and book value of preferred equity to the enterprise value of the firm
Answer
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