Equity Value
Equity value is a market-based measure of the equity value of a firm. It accounts for all the ownership interest in a firm including the value of unexercised stock options and securities convertible to equity.
Equity value differs from market capitalization in that it incorporates all equity interests in a firm whereas market capitalization only reflects those common shares currently outstanding. It also reflects any outstanding debt whereas the market capitalization is a grossed up value including all debt outstanding. In the private equity and mezzanine debt world, equity value is usually measured as a multiple of the company’s EBITDA.
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