6. You are valuingmultiple steady-state companies in the same industry. CompanyAis projected to earn $160 million in

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6. You are valuingmultiple steady-state companies in the same industry. CompanyAis projected to earn $160 million in EBITAnext year, growat 2 percent per year, and generate ROICs equal to 15 percent. Company C is projected to earn $160 million in EBITAnext year, grow at 5 percent per year, and generate ROICs equal to 12 percent. Both companies have an operating tax rate of 25 percent and a cost of capital of 10 percent. What are the enterprisevalue-

to-EBITAmultiples for both companies? Does higher growth lead to a higher multiple in this case? Why do the results in Questions 5 and 6 differ?

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