What are some problems with using a Precedent Transactions analysis?
Answer hidden.
Answer:
No two transactions are completely alike which makes it difficult for them to be 100% comparable. Market sentiment, transaction structure, size of the target company, and whether the acquirer was a strategic company or financial sponsor can all have huge effects on the value of a transaction.
There may not be sufficient data since often times the terms of acquisitions of private companies are not released.
There may not be any recent precedent transactions in the industry you are analyzing.
Want access to more answers like this?
With an EBITDOG membership, you’ll get answers to hundreds of interview questions sourced from the top investment banks across Wall Street.
With an EBITDOG membership, you’ll get answers to hundreds of interview questions sourced from the top investment banks across Wall Street.
Your Wall Street job is just a click away 💸
You have the GPA, the internships, and the resume. We have the answers to the questions they're going to ask. Join EBITDOG and change the trajectory of your career forever.
.png)
.svg)
