I think a good multiple here would be 6 (for entry) and 8 (for an exit)
Corp. Fin. Analyst currently working two finance jobs (and a teaching gig and trying to save my music production solo career). I love avocado's. And yes Cape Town is the most beautiful place in the world. Don't believe me, come thru and find out.
Actually we are looking at buying an asset and we are trying to anticipate an earnings multiple that the owners will want. The asset had been loss making for a while, only being able to pay their first dividend this year of 6mn USD
An excellent exit multiple would be at minimum one that reaches your target return as marketed to your investors. It will vary based on how the exit EBITDA has grown or shunk since the beginning and what your target return is. That doesn't even get into sponsor economics (excellent would be a multiple that gives you an enormous carry)
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Corp. Fin. Analyst currently working two finance jobs (and a teaching gig and trying to save my music production solo career). I love avocado's. And yes Cape Town is the most beautiful place in the world. Don't believe me, come thru and find out.
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All depends on the industry, companies size (Enterprise value), and to some extent the direction of the industry as a whole.
An excellent EBITDA multiple is any multiple higher than your entry multiple
I don't agree, if you come in at a 2X EBITDA does it mean you must sell at 10X EBITDA even if the earnings at your exit are higher than at your entry?
SECOND QUESTION: Why do we pay EBITDA multiple instead of using DCF as a value to pay?
Use a DCF to back up your EBITDA multiple
I am looking at the Mining industry.
I think a good multiple here would be 6 (for entry) and 8 (for an exit)
Actually we are looking at buying an asset and we are trying to anticipate an earnings multiple that the owners will want. The asset had been loss making for a while, only being able to pay their first dividend this year of 6mn USD
An excellent exit multiple would be at minimum one that reaches your target return as marketed to your investors. It will vary based on how the exit EBITDA has grown or shunk since the beginning and what your target return is. That doesn't even get into sponsor economics (excellent would be a multiple that gives you an enormous carry)
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Sed cupiditate voluptatem suscipit pariatur maiores velit similique. Dicta aut voluptatem enim et eum qui. Nisi nulla officia nemo minus officiis non aut. Ipsa molestiae esse repudiandae sit rerum optio incidunt voluptatem.
Maxime est ad voluptas et ea blanditiis. Magni nostrum praesentium ab aut velit dolorem esse molestiae. In culpa neque perspiciatis ipsam dolor culpa. Blanditiis quisquam quidem vitae vitae debitis consequatur. Tenetur cumque voluptatem sit consequuntur quibusdam.
Reiciendis nobis est molestias sunt. Saepe consequatur tenetur provident tenetur beatae dolor. Voluptatem voluptatem ut corporis recusandae cumque earum. Similique nostrum tempora vel repellat perspiciatis enim voluptas. Iure architecto quibusdam vero totam ratione. Hic sapiente deserunt sapiente eveniet asperiores et est.
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