Guided Walkthroughs
Paper LBO — Step 2 of 10: What is the entry enterprise value, and why is EV (not equity value) the number the entry multiple produces?
Model answer
Entry EV = LTM EBITDA × entry multiple = 100 × 10.0 = $1,000M. The multiple is applied to EBITDA — a metric available to ALL capital providers (before interest) — so it prices the whole enterprise,…
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