Acq or Precedent Comparables Flashcards
1
Q
What is the formula for premium in acquisition comparables
A
(offer price/target share price pre announcement - 1) x 100
2
Q
Which multiples do you typically use here
A
forward and trailing enterprise value/revenue, or ev/ebitda
3
Q
problems with this
A
the premiums paid have to be eliminated, the data available regarding these transaction may not be fully inclusive or available. the business and economic cycle greatly affects the valuation and transactions.
