- CFA Exams
- CFA Level I Exam
- Study Session 11. Equity Valuation (3)
- Reading 31. Private Company Valuation
- Subject 6. Market approach methods of private company valuation
CFA Practice Question
Control premium adjustment is necessary in the:
II. Guideline transactions method.
III. Prior transaction method.
I. Guideline public company method.
II. Guideline transactions method.
III. Prior transaction method.
A. I only
B. I, II and III
C. II only
Explanation: In the guideline transactions method the control premium is already included in the multiples. The prior transaction method is most relevant for the valuation of minority interest in a company.
User Contributed Comments 1
| User | Comment |
|---|---|
| richmondo | Good question - it caught me out |