Value Evaluation Of Target Enterprise Based On Eva And Real Options Method

In the market economy environment, the aim of Mergers and Acquisitions(M&A) is to meet the financial goal (the stockholder wealth maximum). The valuation of target companies is an important reference for company acquisition and investment. This paper uses Economic Value Added Valuation method which takes equity capital cost into consideration to measure the company's ability to create value for shareholders. It uses an option pricing model to assess the synergy value especially for the strategic investment M&A which is often ignored the synergies between related enterprises and other potential economic profits. On this basis, the target enterprise value evaluation system of M&A is established, then, further explorations and researches were done. We discussed the application methods in target enterprises for M&A in real cases, and we provided a new way of thinking and choosing to use the method of enterprise value evaluation more rationally in Mergers and Acquisitions.Firstly, the background and significance of Economic Value Added(EVA) valuation is introduced, and the research situation of the acquisition synergies and Economic Value Added are described. The research contents and methods are also introduced.Secondly, the Mergers and Acquisitions, Synergy and Economic Value Added and other theories are introduced. The calculation and adjustment of Economic Value Added is anlyzed deeply, and the corporate value model about EVA theory is deduced.Again, for the three different development stages of companies, we proposed to use EVA valuation model to evaluate the enterprise value, and to use the Black-Scholes model to pricing the Synergies in this merger. Consequently, we established the enterprise value evaluation system in Mergers and Acquisitions. Finally, with the target enterprise value assessment system established in chapter IV, we can evaluate the value of enterprises truely which are involved in the specific case of Mergers and Acquisitions, it means that the target enterprise value assessment system has some theoretical and practical values.