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Consider two firms, A and B, that are in the same industry and have the same operating assets. Firm A has a higher leverage ratio

Consider two firms, A and B, that are in the same industry and have the same operating assets. Firm A has a higher leverage ratio than firm B. Which firm is likely to have the higher Enterprise Value / EBITDA ratio?

Firm A

Firm B

Both firms will have the same EV/EBITDA ratio

Impossible to tell based on the information given

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