Valuation Theory And Methods Of Research

From the 1980s,accompanied by development and deepening of economy, many excellent enterprises entered into finance-oriented stage in western developed countries. This signified corporate value theory has become core syllabus of corporate management. Accordingly, valuation method has become core technique of corporate management. The trend should be paid much attention to by the academia and practice.With the development of market economy and foundation of modern corporate system, the popular exercise of reform on property system, merger and acquisition has happened more frequently than ever before. Thus there is a great need for corporate valuation. With many articles concerning valuation published, valuation theory is attached importance to gradually in our country.Our country became a member of WTO on 10th November this year, our disadvantage of valuation research will completely unmask. After the entry into WTO, there will be dramatic changes in industrial structure and corporate system of our economy, which indicates property exchange market tends to be livelier, valuation theory has more space to expand. The essay is based on the theory and methods of valuation to do some research and analysis, especially arguing about Discounted Cash Flow Method. It is divided into three parts:Part Ⅰ: This part mainly introduces theory of valuation. Begun with the history of valuation, it focuses on several definitions of value and objective of valuation. Later on the purpose of valuation and some differences with related concepts are discussed.Part Ⅱ: This part puts emphasis on methods of valuation. First there is a summary of various methods, pointing out advantages and disadvantages. Second there is an analysis of choice for different methods.Part Ⅲ: This part is concentrated on Discounted Cash Flow Method. Basic concepts and valuation procedures is introduced, then there is an argument on factors that determine the DCF method.