| Article ID: | iaor2001333 |
| Country: | Germany |
| Volume: | 22 |
| Issue: | 1 |
| Start Page Number: | 173 |
| End Page Number: | 196 |
| Publication Date: | Jan 2000 |
| Journal: | OR Spektrum |
| Authors: | Sattler H. |
In the past decade several firm acquisitions have been made with the main purpose of acquiring brands. In many cases earnings multiples of 25 or more were paid. These kinds of acquisitions have often been criticized for the high amounts paid. In this article we perform a risk and sensitivity analysis that identifies situations in which earnings multiples of 25 or more make economic sense.