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M & A Valuation Based On Discounted Cash Flow Method

Posted on:2006-07-04Degree:MasterType:Thesis
Country:ChinaCandidate:R Q ZhangFull Text:PDF
GTID:2206360152485403Subject:Business Administration
Abstract/Summary:PDF Full Text Request
At present, Chinese M&A market has been the third one in scale in Asia, only inferior to Japan's and Hong Kong's. In the face of active M&A, how to price it reasonably and accurately which becomes a key point. Therefore, it is instructive to study appraising methods of the M&A enterprises at the present stage in China. By introducing and studying these theories domestic and international, this paper aims at seeking new way to reflect the M&A value of targeted company, meanwhile also offers a kind of thoughtway about appraising the targeted company.In this paper, the researching approach is to appraise the M&A price by two steps. Firstly, calculates the inherent value of targeted company by DCF method; secondly, finds out the M&A overflow by Real Options approach. On the basic of the combination of theory and practice, this paper strives hard to apply the value appraisal theories to M&A practices.The paper is divided into five parts altogether. First, it is foreword; and second, it is the introduction of relative definitions; third, by comparative analysis about the three models of DCF method, suggests that applying Real Options approach to appraise M&A overflow, then structures a model about targeted company merger value, and further discusses the steps and parameters during applying it. Four, by analyzing the case of Newbridge Asia AIV III, L. P. mergering ShenZhen Developing Bank, brings forward some key points during appraisal. Five, Summarizes and puts forward some suggestions of perfect appraisal.According to the analysis of DCF method, this paper studies how to apply Real Options theory in practice, and sets up a general framework about M&A appraisal, which makes it impossible to organically combine DCF method and Real Options approach, to develop the advantages and offset the weakness each other. At the same time, it provides a case to appraise the targeted bank and looks forward to being helpful to practice of merger appraisal.
Keywords/Search Tags:Merger & Acquisition, Value appraisal, DCF, Real options
PDF Full Text Request
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