In spite of their prevalent usage in practice, not so
much theoretical background is provided to guide the
practical application of multiples. The literature on
corporate valuation gives only sparse evidence on how to
apply multiples or on why individual multiples or
comparable firms should be selected in a particular
context. The present book by Andreas Schreiner develops
a comprehensive multiples valuation framework, which
overcomes many of these problems. It gives answers to
many questions, which have not been clarified so far,
and which must be addressed in order to come up with
sound and convincing valuations in practice. After an
introduction and a review of the literature, Schreiner
outlines the theoretical foundations of equity valuation
using multiples. He derives intrinsic multiples from
fundamental equity valuation models and explains why
some firms deserve higher or lower multiples than its
peers. Based on the weaknesses of the standard multiples
valuation method, Schreiner systematically develops a
list of criteria for the selection of relevant multiples
and the identification of comparable firms.