A Study On Coprporate Valuation Methods In Private Equity

In recent years, because of the rapid development of private equity(PE) industry in China, private equity investment has become a significant source of funding for innovative business growth and industrial restructuring. Speeding up Chinese private equity industry is of great significance. As one of the key elements of the private equity investment, corporate valuation has been rarely researched. Almost all of the Chinese PE institutions follow the Western classical valuation theory to evaluate the companies, resulting in the blur valuation of private equity investment. In the context of current weak equity secondary market and the dwindling profits of private equity investment institutions, the importance of corporate valuation becomes more prominent.The first part of this paper clarifies the research background and significance of the research, summarizes the relevant research at home and abroad, and describes the research content and methods. The second part expounds the connotation, type and role of the private equity investment, and describes the status quo of China’s private equity investments. The third section summarizes the existing Classic valuation theories, and explains the valuation principles and applicabilities of the theory. In the fourth part of the paper, the valuation process is associated with the life-cycle theory. As each life-cycle of company has different characteristics, the valuation methods may be different. The fifth part is the practical application of corparate valuation. An actual case is used to illustrate the choice of the appropriate valuation method and the valuation process. At the end of the paper, conclusions and prospects of the research are drawed.This paper aims to provide private investment institutions with theoretical guidance and methods of operation through the study on corporate valuation methods...