What is valuation primarily used for in investment banking?

Valuation is primarily used to determine the worth of an asset or a company, which is the crucial activity in investment banking. This process involves assessing various factors, including financial statements, market conditions, and comparable company analysis, to arrive at a quantifiable valuation that reflects the true economic value of a business or asset.

In investment banking, accurate valuations are essential for various activities such as mergers and acquisitions, initial public offerings (IPOs), and fundraising. Understanding the value of a target company helps investment bankers advise clients on strategic decisions, negotiate fair prices, and secure appropriate financing.

The other options, while related to financial assessments in varying contexts, do not encapsulate the primary purpose of valuation in investment banking. Employee bonuses and credit ratings are influenced by many factors beyond direct valuation, while assessing market trends focuses on the broader economic environment rather than the intrinsic value of a specific asset or entity. Thus, option C effectively highlights the primary objective of valuation in this field.