Precedent Transaction Valuation Analysis

Another way to value a company is the precedent transactions method. Using this method, you compile information on comparable transactions that have occurred and compare them to the transaction you are working on. For example, if I were working on a deal with American Express acquiring Open Table, I would review other American Express acquisitions and other acquisitions of the same variety. The criteria used to compare these transactions are relatively similar to that of the comparable companies method. Like the comparable companies method, it is an advantage that the precedent transactions method uses public information

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