n NISM Certifications
XV NISM Series XV
Medium

Calculate the Enterprise Value (EV) given: Shares = 100,000, EPS = 5, PE = 14, Debt = 700,000, Cash = 700,000.

Practice question from NISM XV Mock Test 7 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Rs. 45 lakhs

  2. Rs. 70 lakhs

    Correct answer

  3. C

    Rs. 85 lakhs

  4. D

    Rs. 90 lakhs

Why this is the answer

Market Price = PE × EPS = 14 × 5 = 70. Market Cap = 70 × 100,000 = 70,00,000. EV = Market Cap + Debt – Cash = 70,00,000 + 700,000 – 700,000 = 70,00,000.

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