Apply valuation methods to companies undergoing corporate restructuring and explain the values that result

Three relative valuation methods are common. Comparable company analysis applies peers' trading multiples, such as EV/EBITDA, to the target, giving a value without a control premium. Comparable transaction analysis uses multiples paid in past acquisitions, which already embed a takeover premium. Premiums paid analysis adds typical premiums to the unaffected share price. A discounted cash flow model gives intrinsic value. For breakups, sum-of-the-parts values each segment separately, subtracts net debt, and compares the result with market value to measure any conglomerate discount. The takeover premium is measured against the unaffected price, the price before any bid was known: premium = (offer price − unaffected price) ÷ unaffected price. The traps are forgetting to subtract net debt from enterprise value and double counting the premium on transaction multiples.