While companies seem to spend a lot of time and money on finding the proper valuation for the company being acquired during mergers and acquisitions, boards can increase their chances of getting the deal done and approved by focusing on one simply, and very public benchmark. Researchers at Harvard finds that the 52-week high of the stock price of the company being acquired seems to be what matters most when valuing a company during M&A negotiations (see WSJ article). As it turns out, regardless of data from other valuation measures and techniques, many boards will insist that any purchase price is at, or above the 52-week high. To make their case, researchers at Harvard looked at 7,500 deals from 1984 to 2007 and found that psychology and irrationality helped to drive price, and that the company's 52-week high stock price seems to be the starting point for valuation negotiations. In fact, approximately three-fourths of the deals studied were priced above the 52-week high (it should be more random), with those deals also having about the same three-fourths chance of getting shareholder approval. The findings may help to explain why many deals in hindsight seem to not work out for the acquiring company - who appear to be over-paying and/or buying at the high. For traders, the time honored tradition of selling on the news seems justified once in the trade, with the 52-week high helping to provide a reference point when considering risk and return before taking a position. For companies and boards, the most rational thing, as written by the WSJ, it to "use the market's irrationality to its advantage," and not let the opportunity pass. Just ask Yahoo!'s board.