608 Making Key Strategic Decisions arrive at a proper value of ACME. This methodology determines the earnings of ACME without regard to its debt service. Thus, net income on a debtfree basis will be higher than the company’s net income, which typically includes interest expense. The resulting higher value using the debt-free methodology is not only for equity holders but also debt holders. This combined value of equity and debt is known as the market value of invested capital (MVIC). Once the value of ACME’s MVIC is determined, then the value of debt capital is subtracted resulting in the value of.
