A Study On The Real Options Methord In Firm's Mergers And Acquisitions (M&A) Decision-Making

With the rapid developments of China's market economy and the world economy globalization, the competition among the different corporations is becoming more drastic. The focus is changing from material product to capital. M&A is an important method by which firm can realize rapid growth, but the existing M&A theory can't provide rational decision-making rule for firms, it can only explain firm's purpose and motive. Furthermore, valuing M&A target is the core of M&A, The orthodox theory and the decision-making rule, based on the NPV method, can't adapt to the uncertainty. So this thesis, first demonstrate the present theory about M&A, method of valuation and the corresponding decision-making rule, then gives a new method to value an M&A target and develop a decision-making rule to overcome the shortages of orthodox theory. First, this paper summarizes the existing M&A theory and gives some remarks about it, then points out the defect on explaining the purpose and motive of M&A. Second, the author presents and analyses the orthodox...