The Research Of Valuation Methods And Pricing For Target Firm In M & A

Merger and Acquisition is one of crucial global economic development methods, and perfect way to widen scale, form the competition of market. Those companies who can make a good use of it will gain great progresses. The process is very complicated because of all kinds of relationship with different legal regulations. So every factor will be focused on. On the contrast, those companies who handle with it unsuitably will get into dilemma deeply for dispersing enterprises' resource. Author believes how to value target firm is the key factor influencing success and failure. It is one of important area which produces controversy between academy and enterprise. Base on it, this paper do some research on it.Pricing the target firm means how to value the target firm and how to determine the trading price in M & A as participants. The objective of this paper is price strategy. According to those bugs of traditional valuation theories, this paper do some research on price deciding model through methods of option pricing model and game theory, which are new theory achievements. We obtain the closer value of target firm through new method, which is gotten by reconstructing traditional models and working out the value of contingent claims. Then, if there are competitors, we separate the negotiation process into two statuses. Under every condition, we simulate the process on different terms of information, analyse negotiation mechanism, and find out the solutions of price decision. Besides them, we get the reasonable price through working out the game model.Finally, we draw a conclusion about what we get and those disadvantages. And make a summary for further research. We expect more achievements in this area.