Question of the day
2026-07-23
Your football field's bars barely overlap: comps imply $40-50 per share, precedents $60-70, and the DCF $75-90. How do you get to a recommendation?
Answer it out loud first — like you would in the room. Then check yourself:
Reveal the model answer
Model answer
First diagnose WHY each bar sits where it does - some divergence is structural: comps are minority-basis, precedents include control premia and possibly stale environments, and the DCF reflects your assumptions. Check the ordering makes sense (here comps below precedents is normal; the DCF above everything says test your terminal value, WACC, and margin ramp). Second, re-underwrite the weakest inputs - trim aggressive DCF cases, drop unrepresentative deals. Third, weight by relevance to the assignment: for a control sale, precedents and premiums-paid on current prices anchor; for standalone fair value, comps and the DCF do. Then recommend a primary range - typically where the most relevant methods overlap after adjustment - and show the rest as context. Never mechanically average non-overlapping bars.
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