Why multiple-based valuation be different from dcf valuation, Finance Basics

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Why multiple-based valuation be different from dcf valuation

Problem

Your boss asks you to compare your DCF valuation to a simple valuation using a multiple. He asks you to compute the value of the company based on an Enterprise Value / EBIDTDA multiple of 15. Assume EBITDA grows by 10% from 2020 to 2021. Why might this multiple-based valuation be different from the DCF valuation?

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Finance Basics: Why multiple-based valuation be different from dcf valuation

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