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Exit at today's peak multiple

A private equity model assumes it will sell a business in 5 years at 22x EBITDA, today's sector multiple, which is near a 15-year high (the long-run average is 13x). What is the main risk?

A.Exit multiples always rise over five yearsB.High multiples lower the purchase price todayC.EBITDA will rise to match the multipleD.Multiples may revert to normal, cutting exit value

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Exit at today's peak multiple

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