Exam (elaborations)
Technical 8 - Trading Comps questions with verified solutions
- Course
- Institution
Technical 8 - Trading Comps questions with verified solutions
[Show more]
Content preview
Technical 8 - Trading Compsquestions with verified
solutions 2024-2025
What are the pros of using Comparable Companies Valuation? -
answer - quick and easy
- reflects current market valuation level of similar companies
- fewer assumpotions than DCF
- Can be used with limited financial data of target company
What are the cons of using Comparable Companies Valuation? -
answer - may be hard to find comparable companies
- influenced by short-term market fluctuations
- P/E multiple is influenced by capital structure
- Not applicable for companies with negative NI or EBITDA
- unable to reflect the true intrinsic value of the company
What are the 3 criterias to find comparable companies universe? -
answer 1. Same Industry
2. Same listing venue - different venues have different values of a
company
3. Same Size - will influence the valuation of a company
What scenarios can you not use comparable companies for
valuation? - answer 1. Pure play - business is too new (Tesla)
2. No listed comparable companies (SpaceX IPO)
3. Conglomerate - revenue comes from different industry sources
(Berkshire Hathaway, use Method - Sum of the Parts)
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller GUARANTEEDSUCCESS. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $14.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
79789 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now