Highest Value/Valuation Method

archived_user

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Hello guys,
Had an interview the other day and the question of which valuation method produces the highest value came up. My answer was precedent transactions>comparables due to premiums etc. Then I was specifically asked about DCF and I said that it depends on your inputs and estimations but usually it gives a higher price than the other two. The interviewer didn’t seem to like my answer and kept asking for the exact reason which I was unable to provide. After the interview I had a look online with no luck so I am here asking for your guidance! What do you think?
Thanks
 
I like your answer. Strategic buys will pay more for a company due to efficiencies so I think you did well.
 
No they told me I was wrong about the DCF. So I am just wondering what was the problem. I mean, what is the exact reason that DCF yields a higher value? Does anyone know?
 
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