Valuations of target firms based on the comparable companies and recent transactions methods must be adjusted to reflect control premiums.
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If the tangible book value of a firm significantly exceeds its market value for an extended period of time, it can become an attractive takeover target.
Liquidation value is the projected sale value of a firm's assets.
If the market leader in an industry has a $300 million market value and a 30% market share, the market is valuing each percentage point of market share at $10 million. If a target company in the same industry has a 20% market share, the market value of the target company is $200 million.
The comparable recent transactions method is usually considered less reliable than the comparable companies' valuation method.