Company A shares are currently trading at $40 per share. A survey of Wall Street analysts reveals that EPS expectations for Company A for the full year 2014 are $3.50 per share. Company A has 200 million diluted shares outstanding. Company A's major competitors are trading at an average share price / 2014 Expected EPS of 22.0x. When gathering financial documents in preparation for comparable transaction analysis for publicly traded target companies, in addition to any filed merger documents: a. Use the most recently available financials (10-K's and 10-Q's)
b. Use the most recently available financials (10-K's and 10-Q's) as of the announcement date
c. Use the most recently available financials (10-K's and 10-Q's) as of the closing date
d. None of the above
a. Use the most recently available financials (10-K's and 10-Q's)
The correct answer is:
b. Use the most recently available financials (10-K's and 10-Q's) as of the announcement date
When conducting a comparable transaction analysis for publicly traded target companies, it is important to use the most recent financials available as of the announcement date. This ensures that the analysis is based on the most up-to-date information and provides a more accurate comparison to the target company.