In the sense-check EV multiple equation, EV multiple = TVn(GP) * (1+w)^0.5 / LTM EBITDAn. Which variable does NOT appear in the equation?

• A. w
• B. TVn(GP)
• C. g
• D. LTM EBITDAn

Answer: (C)

The expression is a sense-check that ties a terminal value component to a current operating metric and then normalizes by trailing EBITDA. The numerator includes TVn(GP), the terminal value component, times (1+w)^0.5, an adjustment factor, while the denominator is LTM EBITDAn, the trailing twelve months EBITDA. The only growth-related variable that would normally appear in terminal-value calculations is g, but it does not show up in this equation. So the variable that does not appear is the growth rate g.