Research On DCF Method Based On Real Options Valuation Of The Culture Enterprises Merger And Reorganization

In recent years, Chinese cultural media industry had developed rapidly, industry mergers and acquisitions and cross industry mergers and acquisitions emerge in an endless stream. With the developing of cultural industry mergers and acquisitions, the related party in the merger transaction is particularly concerned about the price of underlying asset in the inevitable process of property rights transaction, however, the traditional analysis methods of the underlying asset valuation only focus on the underlying assets’ expected return and risk status in a relatively static vision, they failed to consider with the underlying assets’ uncertain factors which are likely to have impacts on its value. The result may likely to cause the valuation of the underlying asset being underestimated or overestimated, thereby affecting the transaction go smoothly.In order to make the valuation of the assets in Chinese cultural enterprises’ merger and reorganization more accurate, reasonable, this paper introduce the real options theory into the valuation of cultural enterprises’ merger and reorganization in our country, using the advantages of the real option in the investment project management flexibility and the dynamic programming of strategic value, thus to analyze the value of the real option which implied in the underlying assets, at last, this method will provide the more accurate reference for both sides in the acquisition.The first part of this paper mainly introduces the background and significance of the research, the domestic and abroad of relevant research and, the framework and methods. The second part mainly introduces the relevant theoretical basis. Those two parts is mainly to provide theoretical support for the following case studies.The third part is mainly to introduce the DCF method based on the overall cash flow, analyze the parameter selection and the advantages and disadvantages of the model. The fourth part is the analysis of the characteristics of real option in enterprise merger and acquisition, then lead to the applicable steps of the DCF method based on leads real options.The fifth part selects Chinese Media through the acquisition of Chilean star as a case, analyzes the valuation of growth option and the equity which involved in acquisition target Chilean star, then analyses the sensitivity of the impact factors. The last part is the summary of the full text and put forward to the following application of real option. In this paper, the acquired enterprise value not only includes the profitability of all of its assets in the future, but also analyze real option may be implied by the underlying asset value, the valuation real option will have a certain impact on the overall value of the enterprise.