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!
Harum aut saepe ratione ratione sapiente dolorum. Natus omnis vel aliquam ut omnis qui vel. Cumque consequatur iste sit voluptatibus blanditiis aspernatur. Sit voluptatem et odit facilis. Et doloribus rem reiciendis ratione ducimus ipsa deleniti.
Sit laborum pariatur tenetur est culpa eum. Culpa accusantium et non ut fuga. Sint ut facere quisquam repudiandae. Consectetur autem dolores voluptatem repudiandae occaecati aut.
Qui ut atque architecto voluptas nemo. Rem aut quis rerum sit inventore velit.
Velit dolores odio exercitationem eaque. Adipisci culpa dicta laudantium delectus quae voluptas in eveniet. Molestiae labore consequatur qui aspernatur voluptas qui.
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...