Study On DCF Method In The Valuation Of Enterprise

With the reform of economic system and the entering of WTO, enterprise property rights transaction such as in share holding system reform, merge and acquisition will become more widely and international. As the main important method in the evaluation of enterprise, discounted cash flow method will play a more and more important role in the enterprise property rights transaction. Based on the systematic analysis of status quo of domestic enterprise valuation, the paper focuses on the signification of the value of enterprise, the selection of valuation model and the determination of parameters when the DCF method is used for the valuation of enterprise. After discussing the present three attitudes to the definition of the value of enterprise, the paper analyses the relationship between the value of enterprise and assets, then confirms the value of enterprise. Second, the .paper analyses the two traditional models of DCF method and puts forward a new model. Third. on the basis of defining the three parameters of DCF, the paper raises the basic method that using the net cash flow as income index and net cash flow to market price as discount rate, and raises a new way to the adjustment of historical data of net cash flow.