Module VI· DCF Model BuildIntermediate
Question

How do you model net debt adjustments in the EV-to-equity bridge in a DCF?

Answer

Start with enterprise value from the DCF. Subtract net debt and debt-like items, add non-operating assets, and adjust for NCI, pensions, leases, associates, trapped cash, and other claims. Equity value equals EV minus claims senior to equity plus assets not captured in operating EV. Then divide by diluted shares.