Explanation

Answer Example

To value a company for acquisition, I would use three main approaches: DCF, comparable company analysis, and precedent transaction analysis. I’d start with DCF, projecting the company’s cash flows and discounting them using the appropriate WACC. Then, I’d identify similar companies and analyze their trading multiples, such as EV/EBITDA. Lastly, I’d review past transactions in the sector to understand acquisition premiums. For example, in a financial modeling project, I applied these methods to value a tech company at $500M, aligning with the client’s acquisition budget and market trends.