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Precedent Transaction Comparables

In a previous series, we covered trading comparables in depth. Trading comparables (or simply “comps”) are one of the three core valuation methodologies that investment bankers use. In this post, we cover precedent transaction comparables (also called “precedents” or “transaction comps”) – which are also important, especially for an M&A context. Spreading

Market Trading Comps for Investment Banking

Why Trading Comps Matter Trading comps are one of the primary tools of the investment bankers - not just a throwaway investment banking interview question. An industry specialist is supposed to know where things are trading and why, as well as what this value insinuates. For junior bankers (analysts especially), a lot of

Spreading Investment Banking Comps: Preferred, Minority Interest and Adjusting for Subsequent Events

In previous posts, we addressed the equity and debt components in the enterprise value formula: EV = Equity + Debt – Cash & Marketable Securities + Preferred Shares + Minority Interest + Asset Retirement Obligations + Capitalized Operating Leases + Pension Obligations – Investments (including investments in affiliates, long-term investments) +

Spreading Investment Banking Comps: Calculating Fully Diluted Market Capitalization

We will explain the most important part of spreading comps for investment bankers in this post. The brunt of conducting comparable companies analysis is to calculate the appropriate enterprise value, which will have certain components which are "live" and certain components that are the latest historical financial statement data. So to