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 valuation in which different divisions, subsidiaries, or other business segments are valued separately, and the values added in order to value the entire company. It may be used when different metrics and multiples are appropriate for valuing the different segments. Also called a break-up analysis.

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