Fairness Opinion
A professional evaluation provided by a third party, typically an investment bank, to assess whether the terms of a merger or acquisition are fair from a financial perspective.
Implications
An independent assessment provided by a financial advisor or investment bank to determine whether the terms of a transaction, such as a merger or acquisition, are fair from a financial perspective to the shareholders or stakeholders involved.
Example
Example: Before a major merger, a company�s board of directors commissions a fairness opinion from an investment bank to ensure that the offer price is fair and reasonable for its shareholders.
Related Terms
Different from a valuation, which provides an estimate of an asset�s worth, a fairness opinion evaluates whether a specific transaction is fair to the parties involved, considering all relevant financial factors.
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