Study On The Target Firm Valuation In M&A

M&A is a complicated strategy of development and an important way to optimize all kinds of resources of the company, which involves law, finance, accounting and tax issues. Firm value is the basis to successful acquisition price, although there are many other valuation factors involved. Firm valuation is the core of M&A and the key to successful merger and acquisition. At present, valuation method based on assets and market is generally accepted to valuate the target Chinese firms. Discounted cash flow method and option pricing method should be understood and studied more to disclose the economic factors relationship of firm valuation and offer some reference to M&A of Chinese firms.It is the crucial subject to be studied, that how to understand the conception of firm valuation, what are the factors that affect firm valuation, how to choose the methods of valuation for obtaining reliable result in M&A, and whether 900 million of successful acquisition price is higher or lower than Kelong's value.Combination of theory and practice method is adopted as basic studying method. Theory and practice can get mutual development. In China, firm valuation theory falls behind practice. To catch up with practice development, theory should be studied on crucial subject of M&A. Find out why it is caused and how to solve it.The thesis consists of five chapters. In first chapter, it is the studying background and the studying target. In second chapter, it introduces the studying status of firm value and valuation theory, lists generally accepted valuation method, analyzes their advantages and...