PPR – Premiums Analysis STEP 11

The next step in the purchase price ratio analysis is to calculate the premium (or discount) each transaction price represents relative to various historical TargetCo stock prices and TargetCo's current stock price. We can then compare the premiums thus calculated to premiums paid in comparable transactions to see what transaction, or "offer", price per TargetCo share might make sense in this deal.

X-day trading averages can be obtained from FactSet, CapitalIQ, and other financial software. If the explicit figure you seek is not available, you can usually download a spreadsheet containing the closing prices over the last X days and average these prices to yield the X-day trading average.