Series 79 practice questionmediumPrecedent Transactions - Selection Criteria
Which of the following is LEAST likely to be considered a relevant precedent transaction for valuing a U.S.-based software company?
- AA Canadian software company acquired last month
- BA U.S. software company acquired three years ago
- CA U.S. hardware manufacturer acquired last year✓ Correct answer
- DA U.S. software company acquired last quarter
Explanation
Why C — A U.S. hardware manufacturer acquired last year
Transactions involving companies outside the same industry, such as hardware instead of software, are less relevant even if domestic. Geography and recency also matter, but industry match is most critical.
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