The Value Of The Target Company In M ​​& A Assessment Study

Over recent years, corporate merge and acquisition (M&A) are booming in China. In the course of corporate merge and acquisition, the evaluation of target corporate value is rather essential. Proceeding with existing theories of such an evaluation, aiming at the characteristics of M&A, it analyses how to evaluate the target corporate value by means of DCF (discount of cash flow), the Options Pricing Model and EVA system.At the first beginning, it explores the theory and analyses how to ascertain its parameters and the application of DCF , then puts forward the performance prediction system including the trade, industrial and financial analysis of the target corporate. Such a system can predict the probable status of cash flow and therefore help evaluate the corporate value. The optional pricing model, as a tool of measuring risk and return, has a bright prospect when being used in such an evaluation. Then It researches how to use that model to evaluate opportunities of merge and acquisition, the equity of the target corporate, the creditor value and intangible assets of the target corporate as well as variants and input variables of the model. EVA has been widely used in the evaluation of corporate value. It reviews the existing theory and model of using EVA to evaluate corporate value and analyses the EVA system as well as other relevant evaluation systems. Additionally, it explains how to measure added value of merge and acquisition in terms of EVA. Finally, it makes a case study on the merge and acquisition of Huarun sanyoo company to demonstrate the application of DCF.