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← The multiples that matter
1 / 12 · practice
What is the single rule that governs whether a valuation multiple is built correctly?
A
The value on top must be claimed by the same investors as the metric on the bottom
B
The numerator and denominator must both be measured on a forward basis
C
The value on top must always be larger than the metric on the bottom
D
The metric on the bottom must always be a profit figure, never revenue
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