Question
When performing a discounted cash flow analysis to calculate a firm's enterprise value, the best way to value the terminal value is by using: A)
When performing a discounted cash flow analysis to calculate a firm's enterprise value, the best way to value the "terminal value" is by using:
A) EBITDA multiples.
B) EBIT multiples.
C) The perpetuity growth rate of the firm's levered free cash flows (and comparing the implied PE multiples of this result to the firm's current PE multiples as a sanity check, or vice versa).
D) The perpetuity growth rate of the firm's unlevered free cash flows (and comparing the implied EBITDA multiples of this result to the firm's current EBITDA multiples as a sanity check, or vice versa).
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