Valuation
Precedent-Transaction Analysis
Definition
What is Precedent-Transaction Analysis?
Valuing a business using prices paid in comparable past acquisitions.
Example in practice
How This Looks in Practice
Recent bank takeovers provide reference acquisitionThe purchase of control or ownership of a company or business. multiples.
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Related Terms
Valuation
Market Value
The price at which an asset could trade in the market at a given time.
ValuationIntrinsic Value
An estimate of an asset's underlying economic worth based on expected cash flows, assets, or earning power.
ValuationFair Value
An estimate of an asset's appropriate value under specified assumptions or accounting standards.
Capital BudgetingNet Present Value
Present value of expected cash inflows minus present value of expected cash outflows.