Valuation: Comps & Precedents
Why might trading comps and precedent transaction comps give different values?
Model answer
Precedent transactions usually price higher because they include a control premium (paying for 100% ownership) and potential synergies, and they reflect market conditions at the time of each deal. Trading comps reflect minority, public-market prices today. Precedents are also harder to compare due to varying deal dynamics and dated data.
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