steps/comps.2025
Transaction comps - ANSWERS-Looks at what similar companies to what we are trying to value, that
have already been acquired
What is a premium in transaction comps and why do we look at averages for premium? listing price 1
million and final offer 1.2 million - ANSWERS-When the final offer is larger than listing price, so 1. =
20% premium. And we look at premiums over periods of time because there can be externalities if we
choose one day leading to not normal premium numbers
What time frame do transaction comps always use for multiples and for percentage premium pay? -
ANSWERS-LTM and NTM, with 1 day 7 days or 30 days for percentage premium pay
Amongst three different times of valuation methodologies? - ANSWERS-Almost always transaction
comps gives us a higher multiple than trading comps because of control premium
What is control premium? and reasons why a company might pay it - ANSWERS-The premium paid over
the market worth of the company to gain control of the company (50% share increase)
reasons:
1. competitive process
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