We have covered the three approaches and picked one. Now it's time for the next question: Who actually performs these valuations in the real world?
Different professionals handle valuations depending on the stakes, context, and regulatory requirements. Let's explore the valuation ecosystem and its key players.
Engagement Message
Who usually values a company that sells for billions?
Investment bankers dominate high-stakes transactions like mergers, acquisitions, and IPOs. When Microsoft acquires a startup or Tesla goes public, investment banks lead the valuation process.
They have access to market data, buyer networks, and transaction expertise that drives billion-dollar deals.
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Why might investment bankers be best suited for large corporate transactions?
Professional business appraisers handle formal valuations for legal and tax purposes. These certified experts work on estate planning, divorce proceedings, tax disputes, and court cases.
Their valuations must meet strict professional standards and withstand legal scrutiny.
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What makes a court-ready valuation different from an internal estimate?
Financial analysts at investment firms value companies for buying and selling decisions. Equity research analysts at Goldman Sachs or portfolio managers at mutual funds constantly evaluate public company worth.
Their valuations drive billions in investment decisions daily.
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How might an analyst's valuation purpose differ from an investment banker's?
Many companies also have internal teams performing valuations. Corporate development groups evaluate acquisition targets, while finance teams value business units or projects.
These internal valuations guide strategic decisions and capital allocation.
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What advantage might internal teams have over external valuators?
The context determines which professional you need. Selling your company? Investment banker. Divorce settlement? Certified appraiser. Investment decision? Financial analyst.
Each brings specialized expertise, regulatory credentials, and industry relationships.
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Which type of professional would you trust most for an objective valuation?
Some situations legally require certified appraisers. Tax authorities, courts, and regulatory bodies often mandate formal appraisals from accredited professionals.
Other situations prioritize market expertise and deal experience over formal certification.
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Can you think of why legal situations require certified professionals?
Type
Sort Into Boxes
Practice Question
Sort these valuation scenarios based on which type of professional would typically handle them.
Labels
- First Box Label: Investment Bankers
- Second Box Label: Cert. Appraisers
First Box Items
- IPO preparation
- M&A advisory
- Private equity
- Strategic sale
Second Box Items
- Estate planning
- Tax dispute
- Divorce case
- Court litigation
