medium · Investment Banking valuation-core
An analyst is spreading comparable companies and notices that Peer A has a P/E of 15x and Peer B has a P/E of 20x.
If Peer A has higher debt-to-equity leverage than Peer B, what might this suggest about the P/E multiple?
- Peer B has higher Enterprise Value
- P/E is leverage-neutral
- Peer A is objectively cheaper
- P/E can be distorted by capital structure
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