True or false answers are required.
1. As a manager of a publicly held company, your task is to maximize the intrinsic value of the company and to properly manage the expectations of the financial market.
2. 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.
3. Multiples are of limited importance as long as the valuator has produced their Discounted Cash Flow analysis.
4. Customers and end markets are two important factors that help to refine the identification of best comparable companies.
5. When analyzing the “Spread”, the valuator includes firms with outlying values because they are part of the industry.
6. We would generally expect value estimates of precedent transactions of public companies to be less than that of comparable companies because of acquisition discounts.