In this article I will explore the interconnected relationship between investment multiples, the yield on that investment, and the rate of return investors should expect. My overarching view is that even though investment multiples are much more commonly used in the financial world, I would urge investors to instead do their thinking in terms of yield. Yields are more simple and explicit than using multiples, and using yields allows easier comparison across investments. I end the article by recommending investors use free cash flow yield in their decision making.

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