The Method Of Free Cash Flow About Pricing Of Private Equity Investment Fund

Private equity fund contribute to explore the potential of enterprises, integrate enterprise resources, and enhance the role of the value of the practice in recent decades in the knowledge society. Private equity fund be inclined to venture investment institutions, pursuing the maximum appreciation of capital, their ultimate goal is to exit the capital market. Although current foreign private equity fund still holds the dominant position of marketing in China, over the long run, as the domestic equity investment environment is improving, Private equity fund of RMB will also develop in the wider world.Today most of the studies on private equity fund focus on improving the system, exiting mechanisms, developing prospects, rather pricing of the private equity fund. Some private equity fund have their own characteristics, affecting the determination of the value of private equity fund. Private equity pricing factors consider two key of factors by influencing the regression analysis, namely liquidity factors and control benefits. Because its shares can't flow on the open marketing, the assessed value should be discounted as opposed to the listed companies. Because the current research data in this field in China is relatively small, the calculation of discount percentage may be more subjective, the non-negotiable problem is objective reality.Pricing of the private equity is the key about assessing the overall value of the enterprise, while pricing of the enterprise value currently have many methods. The using of free cash flow targets have great advantages by analyzing and comparing the characteristics of each method in the assessment process of corporate value, activities of business investment carried out in the company can't earn money immediately, the object of investing isn't only for short-term profits,may be some long-term goals, particularly the private equity fund is a potential investment, the traditional discounted cash flow limited to the assets or business activities carried out, as a basis for forecasting cash flow. This article intends to select the method of discounted cash flow, you can more fully reflect the true value of the RMB private equity fund. Future cash flow projections are based on historical cash flows, by discounted cash flow method the company's value and the discounted value of future growth opportunities are for the sum, you can more fully reflect the true value of the company, and to determine the intrinsic value of RMB private equity fund. This study combined with theoretical analysis and empirical research, standardized analysis and comparative analysis, qualitative analysis and quantitative analysis. The target company is screened by the AHP, combined with the characteristics of private equity fund. While we can use the target companies (listed companies) to simulate a non-listed company by the data of financial reporting, building a complete set of pricing model. The private equity fund enhance the value of the enterprise by the perfect exit mechanism.