What is NOT a reason why transaction comps generally provide a higher multiple range than trading comps?
A)Buyers pay control premiums
B)Buyers often have the opportunity to realize synergies
C)Buyers receive the right to control decisions
D)Transaction comps are more accurate than trading comps

Question

Quizplus · Accepted Answer

The accuracy of transaction comps is not a reason why they generally provide a higher multiple range than trading comps. In fact, trading comps can be just as accurate if the comparable companies are chosen carefully and adjustments are made for any differences. The other three choices (A, B, and C) are all valid reasons why transaction comps may provide a higher multiple range, as they reflect the value of control and other synergies that may be realized in a transaction.

What Is NOT a Reason Why Transaction Comps Generally Provide