How can an LBO model be used to value a company, and why is it called a 'floor' valuation?
- It is the same as a DCF
- It always produces the highest possible valuation
- It ignores the purchase price entirely
- Solve for the max price a sponsor can pay to hit its return; it floors value because strategics with synergies pay more
- It values the company at liquidation value
Create a free account to answer
It's free — sign up to answer questions and track your mastery.