For private equity, the book says Exit Value = investment cost + earnings growth + increase in price multiple + reduction in debt.
How does this make sense? Aren’t earnings growth and price multiples ratios while exit value is an absolute figure?
For private equity, the book says Exit Value = investment cost + earnings growth + increase in price multiple + reduction in debt.
How does this make sense? Aren’t earnings growth and price multiples ratios while exit value is an absolute figure?