Good afternoon,
Please see below some comments on your questions:
1. Number of years used for historical data:
First, a general comment on the rationale behind choosing a certain period (may be helpful for others):
The optimal number of historical years to use when building a financial model is very situation-specific and not always obvious at the onset. In general, having more years of data to analyze is a good thing, but beyond a certain point, the additional years may offer diminishing returns in value-added.
We recommend students use the last 6-7 years, as this is typically long enough to analyze trends and smooth out cyclicality and one-off impacts/shocks. However, in some cases, it may be beneficial to consider longer periods (e.g., if the company experienced a multi-year shock longer than that period or if that period does not allow for a full appreciation of the industry cycle).
That being said, this does not imply that the same importance should be placed on each year of data used. The goal of the modelling exercise is not to simply project forward averages based on the chosen period.
On your specific case:
It is common for a company to be significantly different after a transformative acquisition. In those cases, it will likely make sense to put significantly more emphasis on the post-acquisition years. However, I would suggest still gathering data for the 6-7 years period, as it may provide valuable insights (e.g., changes in growth profile post acquisition, the ability of management to achieve synergies, changes in the capital intensity of the business, etc).
2. Beta calculation:
The reference date of the valuation (i.e., price target) is December 2025, so you may use any information that is currently publicly available.
I may have misunderstood your point, but why do you think it could be more appropriate to use 31/12/2023? Is it because that is the last full financial year you have available?
Hope this helps, and let us know if you have any follow-up questions.
Best regards,
Diogo Vaz da Silva