Transaction Comps
Study online at https://quizlet.com/_giyxf9
1. Transaction Looks at what similar companies to what we are trying to value, that have already
comps been acquired
2. What is a premi- When the final offer is larger than listing price, so 1. = 20% premium. And we
um in transaction look at premiums over periods of time because there can be externalities if we
comps and why choose one day leading to not normal premium numbers
do we look at av-
erages for premi-
um? listing price
1 million and final
offer 1.2 million
3. What time frame LTM and NTM, with 1 day 7 days or 30 days for percentage premium pay
do transaction
comps always
use for multi-
ples and for per-
centage premi-
um pay?
4. Amongst three Almost always transaction comps gives us a higher multiple than trading comps
different times because of control premium
of valuation
methodologies?
5. What is control The premium paid over the market worth of the company to gain control of the
premium? and company (50% share increase)
reasons why a reasons:
company might 1. competitive process
pay it 2. company is a strategic asset in the industry
3. by acquiring a competitor, market becomes less competitive
4. buyer values company more than others
1/3
Study online at https://quizlet.com/_giyxf9
1. Transaction Looks at what similar companies to what we are trying to value, that have already
comps been acquired
2. What is a premi- When the final offer is larger than listing price, so 1. = 20% premium. And we
um in transaction look at premiums over periods of time because there can be externalities if we
comps and why choose one day leading to not normal premium numbers
do we look at av-
erages for premi-
um? listing price
1 million and final
offer 1.2 million
3. What time frame LTM and NTM, with 1 day 7 days or 30 days for percentage premium pay
do transaction
comps always
use for multi-
ples and for per-
centage premi-
um pay?
4. Amongst three Almost always transaction comps gives us a higher multiple than trading comps
different times because of control premium
of valuation
methodologies?
5. What is control The premium paid over the market worth of the company to gain control of the
premium? and company (50% share increase)
reasons why a reasons:
company might 1. competitive process
pay it 2. company is a strategic asset in the industry
3. by acquiring a competitor, market becomes less competitive
4. buyer values company more than others
1/3
