DCF: Perpetuity or EBITDA

When building a dcf model, why would you choose to use the perpetuity approach to the ebitda approach and vice versa?

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2 Comments

ST

Analyst 1 in S&T - Equities

5y

Ignore my title and apologies for the basic answer bc I’m kind of assuming you already know. But I think typically you would use perp method for companies that have stable cash flows, aren’t lumpy, mature company/industry. Exits seem to be more applicable to companies who have opposite characteristics to those described above.

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Aaleon

CF

5y

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DCF: Perpetuity or EBITDA

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DCF: Perpetuity or EBITDA

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