Valuation: Comps & Precedents
How recent should precedent transactions be, and why does the time window matter so much?
Model answer
There is no fixed rule, but bankers typically prioritize the last 2-5 years, sometimes reaching back further only if deal flow is thin. Recency matters because multiples paid are products of their…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 1,500+ — or go Pro for unlimited reps.
More from Valuation: Comps & Precedents
- What are the main valuation methodologies?
- Why might trading comps and precedent transaction comps give different values?
- Why is EV/EBITDA often preferred over P/E for comparing companies?
- What are the three primary valuation methodologies a banker uses, and in one line each, what is each based on?
- Which of the standard valuation methodologies tend to produce the HIGHEST and the LOWEST values, and why?
- Walk me through how you perform a comparable companies analysis.