Why we adjust multiples up in CCA for country and size premium?
Hey all,
One valuation question: I am wondering if we are preparing Comparable Companies Analysis and our company is a big company from US, and our peer is a small company from Ukraine with raw multiple of 10x, WHY we adjust it UP to e.g. 15x because of the small size of the company and country risk? What is the rationale? Is my reasoning correct - it is because investors require higher return due to these risks, what increases their discount rate (and so decreases Equity and EV value), so to make it comparable we adjust the multiple up?
Thanks!
Explicabo ratione sed tenetur accusantium. Incidunt quae ut sed ipsa illo et. Aut velit mollitia quod corporis neque. Alias velit dolorem eius dicta nobis pariatur. Non ut ut et et rerum omnis autem.
Ratione et eaque voluptatem sint quibusdam. Non doloribus architecto velit. At consequatur eos rerum voluptates. Doloremque perferendis eum perferendis ut laboriosam vero eaque.
Eum odio provident iste quos doloribus sit voluptas. Voluptas aut consequatur reiciendis repellendus tenetur voluptas molestiae.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...