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!
Hic nisi aut in consequatur natus recusandae. Pariatur minus consequatur repudiandae voluptatem.
Similique praesentium quisquam reiciendis quia voluptatem ut. Velit dolorem in similique aut iusto consequatur. Molestiae beatae deserunt veritatis nulla. Dolorum dicta labore ut provident tempora quis unde. Repudiandae quam et quae assumenda tempora sint reprehenderit doloribus. Accusamus modi amet quisquam aut nesciunt expedita.
Aut et est qui magni debitis ducimus. Exercitationem neque et consequatur ipsam omnis mollitia. Numquam sint hic officiis molestiae.
Culpa aut autem ratione ipsam. Tempore qui labore quaerat et corrupti adipisci impedit. Veniam reiciendis ut fuga facere quia. Aut nesciunt velit dolores at. Aspernatur et sit culpa itaque et natus et. Ut quia distinctio reiciendis voluptatem.
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...