Exit Multiple

Investment Banking Glossary

EV/EBITDA multiple assumed at exit in an LBO or used to compute the DCF terminal value: TV = EBITDA_n × Exit Multiple. The conservative convention in LBO modeling is to assume exit multiple equals entry multiple (any expansion is upside). In DCF, the Exit Multiple Method (EMM) is typically preferred to the Perpetuity Growth Method because it is market-based and ties terminal value to observed comp multiples.

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