Study On Valuation Methods In Merge And Acquisition

With the continuing development in the market of property and the establishment of modern enterprise system, an appropriate road needed to increase competitive power of enterprises in our country for China urgently to seek for after entering into WTO. Hereby, we need to combine our national situation and use theories and practices of western developed country in M&A for reference and research deeply on theories and approaches of corporate valuation in M&A. It is very important for improving wholly the quality of Mergers and acquisitions dealing by Chinese enterprises, enhancing continuously corporate core competence, adapting quickly to and joining actively in the global market competition. The thesis aims to search for reasonable procedures and approaches which could reflect corporate value correctly by introduction and research on exiting theories and approaches of corporate valuation in the world, at the same time, puts forward a kind of train of thought for corporate valuation. The direct objective of corporate valuation is to evaluate a corporation. Understanding the value is the basis and precondition of M&A. So how to comprehend and appraise a corporate value is not only the responsibility of the assets appraiser but also the key problem which is worth close attention of investors, corporate management, and investment consultant organization etc. After analyzing corporate value, this thesis gives an analysis on the three methods of corporate valuation, that is, discounted cash flows, market comparative method, assets valuation. Furthermore, it discusses their respective adaptability and limitation, and how to select a proper method to evaluate a corporation practically. With reference to fundamental theory and experience of valuation, this thesis explores the basic theory and practical problem of corporate value, corporate valuation and correspondent, in order to establish a theory and method system as guidance to valuation methods.