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Calculate cost of debt, cost of equity, and weighted average cost of capital (WACC). Some examples of these items are litigation cost, shutdown cost, impairment cost, restructuring cost, acquisition integration expenses, and more. It is a good practice to verify the intended debt-vs-total-capital balance post-transaction when possible.
Precedent Transactions Analysis (PTA) Precedent Transactions Analysis (PTA) is a valuation method that analyzes the prices paid for similar companies in past mergers and acquisitions. PTA is useful for understanding market trends and the premium paid for control in acquisition scenarios.
To perform this analysis, the following are needed: A peer group of 5 or more similar businesses: Can be obtained from sources such as S&P Capital IQ report; or individual research. Information listed in the DCFanalysis: See the items listed under DCF above.
M&A (Merger and Acquisitions): As an investment banking professional, showcasing your experience and knowledge in mergers and acquisitions (M&A) is crucial. Highlight any involvement in M&A transactions, such as due diligence, financial analysis, deal structuring, or client advisory. Let's dive in!
As investment bankers, RKJ Partners possesses a breadth of knowledge and experience in advising buyers on business acquisitions. For the purposes of this article, we will focus on valuation from the perspective of a merger and acquisition transaction, and specifically from the viewpoint of a buyer evaluating a business for sale.
But you would not build models for M&A deals, leveraged buyouts, or debt/equity issuances in research or at least, they would be far simpler than the IB versions. Investment Banking: Which Ones Right for You?
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