Who is responsible for determining a company's multiple range?

The determination of a company's multiple range involves assessing how the company is valued in relation to similar businesses, taking into account current market conditions and trends in the private capital market. The private capital market comprises investors and financial institutions that specialize in equity and debt financing, and they establish valuation benchmarks based on their assessments of risk, return expectations, economic factors, and comparable company performance.

In this context, the private capital market plays a crucial role in determining multiples, as it reflects the collective insights and valuations made by various investors who analyze market conditions. This market-driven approach helps in establishing a realistic and data-backed range for valuations, which can vary depending on a myriad of factors such as industry trends and economic environments.

While the company's management, the board of directors, and the private equity market contribute to overall strategy and individual valuation assessments, it is ultimately the private capital market's influence that holds weight in determining the multiples used in the valuation process.