Regression in the valuation of a telco company
Hello everyone,
I have to value a telco company using multiples. Typically in my region, the multiples range between 6.5x and 8x. And as I am on the sell-side I want to find ways to get the highest multiple possible. One solution I am thinking about is to run a regression of EBITDA margin against EV/EBITDA and justify a higher multiple by the strong profitability of the company. I understand from some colleagues that such regression can have some bias embedded due to the correlation between the independent (%EBITDA margin) and the dependent (EV/EBITDA). Even if it may be true, I think that the regression can be useful and will definitely give some arguments for a higher multiple. Could you please share your thoughts with me on this?
Thank you
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