Study On Merger And Acquisition Pricing Based On Behavioral Corporate Finance

Merger and acquisition (M&A) is one of the important forms of capital collocation, is an important measure of realizing capital element circulation and adjustment of industry structure,is also an effective means by which listed companies form external governance effectively. During the course of M&A, M&A pricing directly concerns the rights and interests of the shareholders of both enterprises, and it is one of the key factors that concern that M&A is successful or not. However, M&A activities are always affected by the irrational behavior of investors and administrators'own. So it is important to make deep research in M&A pricing.In this paper we make research on pricing of M&A driven by mispricing of the combining firms on stock market or driven by manager's overconfidence based on behavioral corporate finance. In this article, we analyzed the important factors which influence M&A pricing, and explained how stock market mispricing and manager over-confidence influence M&A pricing. Following that, we measure the factors which influence M&A pricing with methods of improved DCF, inside calculating and improved discrete fuzzy number, and bring up the method to calculating stock changing rate.By competing the new method with traditional method, we find out the stock changing rate calculated by the new method is more exact. We established the pricing models of M&A driven by stock market mispricing and manager's overconfidence, which can be used to calculate the available range of M&A pricing. Based on the distributing rate of synergy value which is calculated by the contributions of both sides to the combined corporation, we can get a referrence price of M&A pricing by the pricing models. The decision-maker can take the reference price as warranty to make decisions. In this article, we induct the influence of stock market mispricing and manager overconfidence to the research of M&A pricing. In the pricing models, we eliminate the influence of stock market mispricing and manager overconfidence in M&A pricing by calculating the stock changing rate and measuring the degree of manager over-confidence, so the final M&A price is more exact and more reasonable. At last, we explain the application of the two pricing model by citing two examples.