Exit multiple method
Valuing the business beyond the forecast through a multiple: the final forecast year's metric is multiplied by an exit coefficient.
How to read the number
An alternative to the constant growth formula; the gap between the two is a useful check on whether a model is inflated.
When the metric lies
The multiple is taken from today's market and carried into the distant future, embedding the assumption that the market will value the company then as it does now.
Also known as: exit multiple