The enterprise value includes two other important costs that are like debt: preferred stock and minority interests. Preferred stock is stock that pays its holder a preferred dividend. (It is preferred because it is paid before the common stock dividend and has some other rights the common stock doesn’t have. If the company doesn’t have enough money to pay both, it can only pay the dividend on the preferred stock.) It is like debt because the dividend is fixed and must be paid regularly, just like interest. The enterprise value penalizes companies with preferred stock by adding the preferred
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