You are tasked with doing Relative Valuation of a profitable business. You chose a set of 8 publicly traded comps and computed their EV/EBITDA and P/E multiples. Which of the following are true?

I) If there is significantly less dispersion of multiples across comps using P/E ratios compared to EV/EBITDA ratios, you should use P/E ratios to do your Relative valuation.

II) One reason why there might be less dispersion of multiples across EV/EBITDA ratios compared to P/E ratios is that EV/EBITDA automatically control for risk differences arising from leveraging differences, whereas P/E ratios do not.

III) For a given business, EV/EBITDA multiples are always smaller than P/E multiples.

		Only I.
		Only II.
		I and II.
		Only III.
		I and III.
		II and III.
		All of them.
		None.