How do you decide on the exit multiple?

After the projection period, it can be assumed that the company is at a “mature” stage. To find the exit multiple, we can take the median EBITDA multiple from a set of mature comparables. These companies should be larger and more mature, and therefore have a lower EV / EBITDA multiple compared to fast growth companies. They are representative of what a mature company should be trading at in their industry.

If there are no mature comparables, we can take a blue-chip stock average to be conservative.