Takeover valuation methods

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Which of the following statements is incorrect with respect to takeover valuation methods? Group of answer choices

(a) The discounted cash flow (DCF) valuation method attempts to determine the enterprise value of the target company by comparing it with similar, publicly traded companies operating in the same sector.

(b) The DCF valuation method can directly incorporate the operational improvements and other synergistic efficiencies that the acquirer intends to implement.

(c) The market-multiple valuation method is subject to distortions that might arise due to market misvaluation and/or accounting policy.

(d) One drawback of using the market-multiple valuation method is that identifying closely comparable firms may be challenging.

(e) The transaction comparable valuation method can be useful for takeover negotiations.

Reference no: EM133060705

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