⟩ Between DCF Analysis and Transaction or Public Comparables, Which Is Most Likely to Give the Highest Company Valuation?
The fairly simple and straightforward answer to this question is it depends on variables such as the discount rate used in the DCF analysis, the choice of comparables, the strength or weakness of the industry, and the specific companies being compared. You could also note that generally, without considering any of these variables, comparable transactions analysis is likely to render the highest value simply because it includes a premium for equity investors.