Why is enterprise value more important than an equity value, tell the difference between the two

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Accepted Answer

Enterprise value is more important than equity value as it includes debt and cash, giving a more accurate picture of a company's total value.

Enterprise value takes into account a company's debt and cash, while equity value only considers the value of the company's shares.
Enterprise value is a more comprehensive measure of a company's total value, as it reflects the cost of acquiring the entire business.
Equity value can be misleading as it does not account for a company's debt, which can significantly impact its overall value.
For example, if a company has a high level of debt, its equity value may appear low, but its enterprise value may still be high due to the value of its assets and cash reserves.

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