Preliminary Valuation: Comparable Transaction Analysis

Which of the following is a similar characteristic of both comparable company analysis and comparable transaction analysis?

That's right! Both methods gather valuation metrics, although for different purposes, and then use descriptive statistics such as mean and median to settle on an appropriate value for the firm under analysis.

Not quite. A takeover premium is required for comparable company analysis, but the acquisition value is directly estimated in comparable transaction analysis, precluding the need for a takeover premium estimate.

That's not right. Neither of these methods requires the production of pro-forma statements. That's a step in a third method called "discounted cash flow analysis."

The use of descriptive statistics

The estimation of a takeover premium

The production of pro-forma statements