The market approach is a valuation method that determines the value of a private company based on the sale prices of comparable companies or transactions in the market. This approach relies heavily on data from actual market transactions to estimate a company's worth, making it particularly useful for investors who want to understand how similar businesses are valued. By analyzing market multiples and comparable sales, this method provides insights into how external factors influence valuation.
congrats on reading the definition of market approach. now let's actually learn it.