International Journal For Multidisciplinary Research

E-ISSN: 2582-2160   •   Impact Factor: 9.24

A Widely Indexed Open Access Peer Reviewed Multidisciplinary Bi-monthly Scholarly International Journal

Call for Paper Volume 8, Issue 5 (September-October 2026) Submit your research before last 3 days of October to publish your research paper in the issue of September-October.
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Volume 8 Issue 5
September-October 2026

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Corporate Valuation Methods in Investment Banking: A Comparative Review of DCF, Comparable Company Analysis, and Precedent Transactions

Author(s) Aarav Gupta
Country India
Abstract Corporate valuation is a fundamental component of investment banking because it provides a structured basis for assessing businesses, supporting mergers and acquisitions, evaluating investment opportunities, and guiding strategic financial decisions. This secondary research paper comparatively examines three widely used corporate valuation methods: Discounted Cash Flow (DCF), Comparable Company Analysis (CCA), and Precedent Transactions Analysis (PTA). The review evaluates the theoretical foundations, data requirements, assumptions, strengths, limitations, and practical applications of each approach. DCF estimates intrinsic value based on expected future cash flows and is particularly sensitive to assumptions concerning growth, profitability, discount rates, and terminal value. CCA determines value using market-based multiples of comparable publicly traded companies, while PTA uses valuation multiples derived from completed transactions and incorporates acquisition-related factors such as control premiums. The analysis finds that no single valuation method provides a universally reliable measure of corporate value. Instead, the effectiveness of valuation depends on the quality of financial information, selection of appropriate comparables, forecasting assumptions, industry conditions, and broader economic factors. The paper also considers the growing role of data analytics and artificial intelligence in financial analysis and valuation. Overall, the review supports the use of multiple valuation methods to develop a more balanced and defensible assessment of corporate value in investment banking.
Keywords Corporate Valuation, Discounted Cash Flow, Comparable Company Analysis, Precedent Transactions, Investment Banking, Valuation Multiples, Financial Analysis
Published In Volume 8, Issue 5, September-October 2026
Published On 2026-10-05
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E-ISSN 2582-2160
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CrossRef DOI prefix of IJFMR is 10.36948/ijfmr

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