Final answer:
Transaction comps generally provide a higher multiple range than trading comps due to reasons such as control premium, market sentiment, and unique value-creating factors specific to the transaction.
Step-by-step explanation:
One reason why transaction comps generally provide a higher multiple range than trading comps is that transaction comps are based on actual mergers and acquisitions, which tend to have higher valuation multiples. This is because these transactions typically involve a control premium, where the acquirer pays a premium above the market price to gain control of the target company.
Another reason is that transaction comps reflect the market sentiment at the time of the transaction, which can result in inflated multiples if the market is optimistic or undervalued multiples if the market is pessimistic.
Additionally, transaction comps can include synergies and other value-creating factors that are unique to the specific transaction, which can drive up the valuation multiples.