Is it the Market or the Model? Petitioners in Delaware appraisal cases must necessarily argue that fair value exceeds the deal price. In contrast, financial economists tend to view prices from a well-functioning market as “true north” when valuing a stock. Valuation models—such as a discounted cash flow (DCF) model—+can be important tools but are known to be sensitive to their numerous inputs. When such a model results in a valuation that is at odds with market prices, it is imperative to understand the disconnect: Is it the market or the model that is wrong? In this Q&A, Analysis Group…
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Beyond Deal Price, Consider Deal Structure, Earnouts, and Appropriate Standard of Value When one company is acquiring another, the deal price is often the primary factor considered. Too many times, however, critical issues are overlooked, explains Sean R. Saari, CPA/ABV, CVA, MBA. Smart Business spoke with Saari about five questions any business valuation any acquirer needs to consider: