The Market Value of Debt denotes the fair market value of the loans book of a business entity. To arrive at the fair market value of equity, the loan is deducted from the enterprise value. It is normally the market value, and not the book value, of the loan (as recorded in the books) that is deducted from the enterprise value. It is important to note that the market value of the loan is not the same as the book value of the loan. The market value of the loan is a measure of how much it will cost to sell the loan of the firm to the financial market. The market value of the loan can be higher or lower than the book value of the firm’s loan depending on the circumstances of the business and developments on the financial market.