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EV/EBITDA is a widely used multiple in this relative valuation approach. What is EV/EBITDA? Investors and analysts widely utilize the EV/EBITDA multiple as a key valuation metric. The multiple is calculated as Enterprise Value (EV) divided by EBITDA. Breaking down the multiple What is EBITDA?
Treasuries, its less impressive. An 85% EBITDA margin may not translate into an acceptable IRR if the project exceeded its budget by 2x and took an extra year to finish. Since they are deemed essential services, governments regulate them strictly by setting an allowed or authorized Return on Equity and capitalstructure.
Concept of notional interest : It is proposed to introduce notional interest, the idea of which is to allow the deduction during 10 consecutive years of this "synthetic" interest, within the famous limit of 30% of the company's EBITDA. The CMU aims to better balance bank financing against capital market financing.
Practitioners assume the business is sold as a multiple of some financial metric like EBITDA, based on what they can see today for other businesses that were sold, and what these comparable trading multiples are. . Risk free rate (can use 10y Treasury). EV/EBITDA Multiple. Exit Multiple (EV/EBITDA). Cost of Debt.
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