Preference for a Specific Valuation Method
I just found this paper by Lilia Mukhlynina and Kjell G. Nyborg, I thought it was interesting so I wanted to share it.
The paper breaks down what professionals like to use as a valuation method in consulting, IB, PE and AM.
In short, consulting and IB like using both DCF and multiples and PE and AM like sensitivity valuation.
The most liked multiples were EV/EBITDA (consulting and PE) and P/E (IB and AM)
The most liked DCF was WACC across all (except AM who preferred NPV)
They established the reason for why professional might prefer a certain valuation method was because of the sociology hypothesis which states that professionals conform to the indust. norm. (which makes sense because if your boss likes it a certain way no one would really do it another way)
Heres the full read if someone is interested
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