Valuation multiples are used in comparing investment projects by providing a measure of the efficiency of capital use between different companies or projects. They are based on assumptions of Return on Invested Capital (ROIC), reinvestment rate, and other factors. These multiples help derive forecasts for net income and equity value, and allow for a comparison of returns over the long term. They also provide insight into the sensitivity of returns to the core assumptions.
Need help with which companies or projects to invest in? As a key driver of value in business, ROIC...
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