Explanation:
The prior transaction method uses pricing multiples from previous acquisitions of entire companies (both public and private) to value a private company. This method is particularly relevant for private company valuation because it reflects actual transaction prices for controlling interests, which can be more comparable than public market trading multiples for minority interests.
An analyst seeks to value a private company using a market-based approach. Which of the following methods is based on pricing multiples derived from acquisitions of entire public or private companies?
A
Prior transaction method
B
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