hard · Private Equity value-creation
A buyer uses the 'Gordon Growth' method to calculate terminal value in a DCF. The Year-5 FCF is $22M, WACC is 10%, and the terminal growth rate is 3%.
If the company currently has $35M in EBITDA, what is the implied exit EV/EBITDA multiple?
- $220M
- 7.0x
- 11.5x
- 9.0x
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