Which valuation method is typically expected to yield the highest valuation?

The expectation that Transaction Comparables Analysis yields the highest valuation stems from the method's reliance on actual market data from similar transactions. This approach uses recent sales of comparable companies to determine a valuation multiple, reflecting what buyers have recently paid in the market for similar entities. Since these transactions often represent the values that buyers are willing to pay, the resulting valuation can be higher due to market exuberance, strategic acquisitions, or synergies that buyers believe they can realize.

In contrast, methods like Discounted Cash Flow (DCF) analysis can yield a more conservative valuation, as they rely heavily on projections of future cash flows, which may be optimistic or pessimistic depending on the assumptions made. Comparable Companies Analysis also considers public market valuations, which may not capture the full premium a buyer is willing to pay for control or specific strategic advantages. Intrinsic Value Analysis generally assesses a company based on fundamental metrics and may also project a conservative approach, focusing on underlying economic value rather than market sentiment.

Therefore, the nature of Transaction Comparables Analysis, which reflects real-world transactions and can capture market dynamics, leads to it typically providing the highest valuation among the methods listed.