Question
True or False - The foundation for the Precedent Transaction Model is built on the premise that similar companies provide a highly relevant reference point
True or False
- The foundation for the Precedent Transaction Model is built on the premise that similar companies provide a highly relevant reference point for valuing a given target, due to the fact that they share key business and financial characteristics, performance drivers, and risks.
- The appropriate continuing value for the Discounted Cash Flow model is the growing perpetuity model (Gordon Growth Model).
- The fundamental purpose of scenario analysis is to better deal with the cash flow uncertainty underlying the final valuation.
- One of the strengths of the Economic Profit model is that it clearly shows the amount of financing required for a particular year.
- Companies in an industry sector represent the best comparable companies.
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