Analysis Of Valuation Adjustment Mechanism Based T Company Private Equity Investment Values

With the entrance of our country into the deep water area, the gove rnment hasspecifically puts forward to adjust the economic developing means, takes the marketas the dominance, constructs the innovation-oriented society and pushes thetransformation and upgrading of the industry. And private equity investment developsthe very important function in constructing our domestic multi-level capital market,optimizing resource allocations, cultivating innovative enterprises and promoting therecombination and upgrade of the industry；Besides, the self high return rate ofprivate equity investment has made it develop very rapidly in the short over10yearsafter entering our country. However, the development of this industry is far frommature. After experiencing a period of barbarous growth, it has entered the adjustmentperiod, the idea of value investment has received more attention than before and thekey point of its implementation is the precise valuation on this project.Under this background, the paper selects a private equity investment transactionbetween H fund and T Company as the case and explores how to make the reasonablevaluation on the project. The paper firstly introduces emphasized main points,valuation methods and other related basic theories in the private eq uity investment,emphasizes the elaboration of EVA valuation model and its advantages in the valueevaluation aspect and explains the effects of valuation adjustment mechanism onproject values as well and how to use option pricing model to make the valuat ion on it;it subsequently analyses the industry, self business, financial situation and otheraspects of T Company and makes qualitative judgments on its future developingtrends; it takes the above content as the basis, predicts the profitability situati on of TCompany in the next three years, uses EVA valuation model to make the companyvalue measurement, adopts Black-Scholes option pricing model to analyze thevaluation adjustment mechanism value signed by both trading parties at this time andfinally acquires the project valuation conclusion of this private equity investment.The paper obtains the conclusion as below: Initiatively, EVA equips withadvantages in private equity investment valuation application aspect for matching thekey principle of the maximization of shareholder values, applies the option pricingmodel of Black-Scholes into the valuation of valuation adjustment mechanism toequip with simple and practical characteristics, and expects to acquire the more objective and accurate project valuation conclusion assisted with valuation results byother valuation methods as reference; Besides, T company has good potentials forgrowth, which basically fits the investment standard of private equity investment, theproject expected investment return rate is higher; finally, valuation adjustmentmechanism produces certain influences on the investing value of this project, whichshould not be ignored by both trading parties.