Question

Define each of the following three terms, and briefly describe how they are used: comparable companies analysis, comparable transaction analysis, and implied price

Answer 1

A comparative company analysis is used for measurement of evaluation of the company by using the other company matrix, so if I am valuing share of Tesla I will be using the matrix of Ford.

Compatible transaction analysis is used for measuring the value of a potential target company, who is a potential candidate for merger and acquisition by the company in the same line of business.it is always used by the company in the same line of business, in order to assess the value of its competitor, which can also be a potential merger and acquisition candidate.

Implied price is a spread price which is generated by using prices in two different markets. It is equal to the amount of stated value which have been divided by the conversion rate.