Enterprise & Equity Value
Is EV/EBITDA a valid multiple? Is EV/net income? Is P/EBITDA? Explain.
Model answer
EV/EBITDA is valid - both are pre-interest (firm-level). EV/net income is INVALID - EV is a firm-level (pre-interest) value but net income is post-interest (equity-level), so the claimants are…
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