Determining a company’s fair value is crucial in the M&A deal process.

I. Calculating Fair Value

From a legal standpoint, a company’s value can be calculated by any technique or method that is admissible in court and generally accepted in the financial community. However, most companies and valuation experts rely on three valuation methods for M&A transactions.

A. Discounted Cash-Flow Analysis

The principal valuation technique used in M&A transactions is the discounted cash-flow, or...