Equity Value
The value of a company attributable to its equity holders, calculated as enterprise value minus net debt (debt minus cash). When a buyer 'pays $5M for the business' in a stock sale, that $5M is the equity value — the buyer also assumes any debt. In a typical purchase agreement, the headline price is enterprise value, but the cash actually received by sellers is equity value minus transaction costs and any holdbacks.
Where This Matters
Everything business owners need to know about selling, exiting, or transitioning out of their company — from valuation to tax strategy to deal structure.
When co-owners disagree — from buyout negotiation to mediation to dissolution. Practical guidance for resolving business conflicts without destroying the company.
Related Terms
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