medium · Investment Banking
An analyst is comparing two companies with identical revenue, EBITDA, and EBIT, but Company A has $500 million of debt and Company B has no debt.
Which statement is correct regarding their valuation multiples?
- Company A will have a higher P/E multiple
- Company B will have a higher Enterprise Value
- They should have identical EV/EBITDA multiples
- They will have identical Price/Earnings multiples
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