Series 79: Sum-of-the-parts (SOTP) Analysis

Taken from our FINRA Investment Banking Exam

Definition of the term Sum-of-the-parts (SOTP) Analysis...

a mode of valuing companies that have subsidiaries, divisions, or other business segments that operate in different industries. In an SOTP analysis, each business segment is separately valued. The values for each segment are then added together to produce an enterprise value or enterprise value range.

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