medium · Principles of Finance valuation
An analyst is looking at a 'Football Field' chart in a valuation report. They notice that the valuation range from 'Precedent Transactions' is significantly higher than the range from 'Public Trading Comparables.'
What is the most likely reason for this?
- Public trading comps are based on outdated historical earnings.
- Precedent transactions are always more accurate than public market data.
- Precedent transactions include a control premium paid by the acquirer.
- Trading comparables include the value of expected future synergies.
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