Why does the Precedent Transactions valuation method typically yield higher valuations?

Question:

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Introduction to Corporate Finance What Companies Do

ISBN: 978-1111222284

3rd edition

Authors: John Graham, Scott Smart

See More Books

Question Posted: Mar 26, 2015 07:06 AM

See More Questions

Why do callable bonds typically have a higher yield to maturity than noncallable bonds, holding all other things constant? Is the yield differential between callable and noncallable bonds likely to...
Why do interest rates on consumer loans typically average higher than on most other kinds of loans?
Why do firms with diverse shareholder bases typically pay higher dividends than private firms or public firms with more-concentrated ownership structures? How are fixed dividends used as a bonding...
Matheny Inc. went public 3 years ago. The board of directors will be meeting shortly after the end of the year to decide on a dividend policy. In the past, growth has been financed primarily through...
Using diagrams of the market for capital, determine the effect of the following events on market interest rates: a. Consumers increase their saving rate. b. Advances in nanotechnology reduce firms'...
(a) Explain conceptually why the proportion of variance accounted for equals 1.0 with a perfect correlation. (b) Why should you expect most relationships to account for only about 9% to 25% of the...
Dairymaids yogurt goes through two sequential processes in two departments: Fermenting and Packaging. Assume that in the Packaging Department, Step 4 of the process costing procedure indicated the...
Doris Stann started her practice as a design consultant on September 1, 2017. During the first month of operations, the business completed the following transactions: Sep. 1 Received $47,000 cash and...
15. A simple LR circuit is connected to a battery at t = 0. The time instant at which rate of energy storage in inductor is half of power delivered by battery (a) In 2 (c) In 2 (b) In () (d) In 3 16....
A load of lumber er weighing W = 25 kN is being raised as shown by a mobile crane. Knowing that the tension is 25kN in all portions of cable AEF and that the weight of boom ABC is 3kN, determine (a)...
Explain how agency problems may lead to non-value-maximizing motives for mergers. Discuss the various academic theories offered as the rationale for these agency probleminduced motives.
Would a large technology company and a large conglomerate (that operates in many industries) be good comparable firms for a multiples-based valuation? Why or why not?
While an engineering manager may prefer to use CFAT estimates to evaluate the AW of a project, a financial manager may select AW of EVA estimates. Why are these preferences predictable?
Consider a monopolist with the (inverse) demand function: Pb = 385 - 13 Qb. Given an increasing marginal cost: mc = 36 + 4 Q, how much DWL is created ? (Assume fixed costs = 13 .)
Price per TV Quantity Demanded per Month Quantity Supplied per Month $800 2,000 12,000 750 3,000 11,000 700 4,000 10,000 650 5,000 9,000 600 6,000 8,000 550 7,000 7,000 500 8,000 6,000 450 10,000...
X Inc. and Y Inc. are virtually identical companies with identical cost structures and very similar business practices operating in the same lines of business. X Inc. is a public company based in...
4. If an element in a binary heap is stored in an array at position i and the root is at position 0, a) where is the parent stored? b) where are two children stored?
Which banks are currently listed as too big to fail, B) who regulates these banks, and C) what is the name of the supervisory program?
Mary is Executive Director of the Helping Hand Assistance Agency, a non-profit organization that provides support and services for adult caregivers. The Helping Hand Assistance Agency has been...
The ultimate goal of Google, Bing, and other consumer search engines is to provide users with search listings that contain useful information on the topic of their search. What recommendations would...
Jason wants to open a checking account with a $ 100 deposit. Jason believes he will write 15 checks per month and use other banks ATMs 8 times a month. He will not be able to maintain a minimum...
Casey has $ 1,000 to invest in a certificate of deposit. Her local bank offers her 2.5% on a 12- month FDIC- insured CD. A nonfinancial institution offers her 5.2% on a 12- month CD. What is the risk...
Mike, a recent college graduate, opened a checking account with a local bank. He asked numerous questions before deciding on this bank, including inquiring about checking account fees and annual...
Determine the slack / float of all activities.
Question Content Area Changes in current operating assets and liabilities indirect method Victor Corporation's comparative balance sheet for current assets and liabilities was as follows: Line Item...
Determine a value of m (if possible) for which f is continuous at x = 1. mx-3 if x <1 f(x)= 3x if x1

Why does the Precedent Transactions valuation method typically yield higher valuations?

Question:

Step by Step Answer:

The Precedent transaction multiples are based on completed MA transactions where a buye...View the full answer

Introduction to Corporate Finance What Companies Do

Students also viewed these Corporate Finance questions