Are you for real? — M&A method provides compelling evidence of value

Description

Abstract: Many believe there’s no better way to value a business than to compare it to similar, real-life companies involved in mergers and acquisitions (M&As). Doing so is popularly known as the M&A method, which falls under the wider “market approach” to valuation. But market data is far from perfect. The key to overcoming its challenges is thoughtful, methodical implementation. This article discusses six steps appraisers use when applying the M&A method. A sidebar shows when it’s reasonable to reject market data.