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Understanding Valuation Techniques in Mergers and Acquisitions

Sun Acquisitions

This approach relies on analyzing the market value of comparable publicly traded companies, known as guideline companies or multiples. Income-Based Valuation The income-based valuation method focuses on the target company’s ability to generate future cash flows and assesses the present value of these cash flows.

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Mergers and Acquisitions Valuation Strategies: Unlocking the Secrets to Successful M&A Transactions

Sun Acquisitions

Comparable Company Analysis (CCA): CCA involves comparing the target company to similar publicly traded companies. CTA provides a more industry-specific perspective and is useful when there are limited public comparables. It involves forecasting cash flows and applying a discount rate.