Value Evaluation Of Listed Enterprises Basd On FCFF Model

With the rapid economic development and continuous improvement, mergers and acqui-sitions in China’s capital market have become increasingly frequent. Mergers and acquisitions crossing different industries is becoming a trend. But the success of mergers and acquisitions almost depends on the reasonable price of M&A. How to assess the value of the target ente-rprise correctly and scientifically has become the key to achieve success in M&A. At present the enterprise value evaluation has formed a perfect theory system, and has been widely used. Choosing the integration of the dairy industry as the breakthrough point, the dairy industry’s largest merger--Mengniu Dairy Group acquired the Ashley International Group as the example,and "Assets AppraisalStandards--the Enterprise Value" implemented on July1,2012as the basis, this thesis analyses of the national, industrial, enterprise economic environment, assesses the value of target enterprise by utilizing the enterprise free cash flow method, desc-ribes the valuation process and selection and calculation of estimation parameters in details.The purpose of this thesis is to provide a simple and effective model of the acquisition for en-terprises and valuation agencies and to provide some help and convenience to assess value of target enterprise in M&A of dairy industry in the future.The chapters of this paper are as follows:The first chapter is the introduction, describing the research background, purpose, signif-icance, possible innovation points and related literature review of this thesis. Thesecond cha-pter is the related theoretical research method of DCF--one of the income methods to assess the value of enterprises. It mainly introduces the theoretical basisand theassessment of inco-me method discount model, analyses the differences amongthose models in thescope of ap-plication, points out the advantages, existing problems and related assumptions of the enterpr-ise discounted free cash flow model, which provides theoretical basis for the analysis of the case. After the four chapter is on the analysis and calculation of Mengniu buys this one speci-fic case Yashi Li, one of the third chapter is the analysis of background, target and scheme of the M&A case. The fourth chapter assets the external and internal national, industrial, enterp-rise economic environment of Ashley International Group, and describes the valuation process and selection and calculation of estimation parameters in details. The fifth chapter is the pr-ocess of using FCFF model in specific cases and the process of describing the acquisition, analysis and calculation ofeach parameter. Moreover, this chapter shows the improvement of FCFF model by adopting the dynamic cost of capital so as to realize the dynamic model and eventually form a reasonable and effective evaluation to the enterprise value. The sixth chapter, the comparison between the outcomesof this thesis and the actual purchase price confirms the conclusion in this thesis. This thesis hopethat through research and analysis of this case, a simple and effective model could be established so that could provide some help and convenience for enterprises and valuation agencies to assess value of target enterprise in M&A of dairy industry in the future.