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Mismatched multiple and metric

Peers trade at 12x forward (next 12 months) EBITDA. An analyst applies 12x to the target's trailing EBITDA, though the target is growing 25% a year. What is the effect?

A.Value is overstated, since trailing EBITDA is higherB.Value is understated, since trailing EBITDA is lowerC.No effect, as the multiple is the sameD.The result becomes negative

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Mismatched multiple and metric

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