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Sorry -- replied without reading too closely.

I am with the party line on this one. You use the market value of the debt and equity just like one ought to mark up the enterprising capital to market.

The rationale as I believe already stated is that you use the market value because that is what you would have if you sold the equity to a third party in an arm's length transaction. (There are control issues that might demand a premium over a minority passive stake but that's getting beyond the point.)

Also if Wrigley was going to raise capital today in a secondary offering the price received would be near current levels -- considering dilution etc after the offering is placed. So if it wanted to raise capital via a stock offering it would receive ~$60 times the amount of shares sold minus the friction of the transaction.

Hope that didn't make things worse :)

MrT
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