For one of the interviews I had, the interviewer asked me the logic behind using, I screwed up the answer cuz I have never really thought about why we could use an exit multiple to calc TV (Any input would be most appreciated).
I also have trouble understanding why it would even make sense to apply comp multiples, which are collected from the present time, to the subject company'sat a time so far into the future.
In addition, do we usually use LTM EBITDA or current EBITDA or future EBITDA for the exit multiple? How do we select exit multiple, by taking themultiples of over the past years or....?
Thx a million guys!!!