Research On The Improvement And Application Of The Income Method In The Valuation Of Mergers And Acquisitions Of Listed Companies

Nowadays the economic is developing in a rapid speed and the industry becomes more and more concentrating.With the power of the capital market,the enterprises improve their management structure and market position,enhance the driving force of economic development,and become a strong power to promote the sustained and stable economic.As the Chinese IPO policy stops,it is quite hard for the enterprises to list independently.Enterprise privatization,acquisitions and mergers will become much more common than before.How to price the enterprise asset has become one of the most important problems in the reorganization.At present,asset assessment report from an independent third party is an important reference for the transaction price.In this essay,I use the evaluation reports of the merges and reorganization which happened by the Chinese listed companies in 2014 and 2015,and I use statistical analysis method to analyze the present situation of income method and selection of parameters of the income method determined,especially the use of the discount rate and the parameters of the model.And I find the following conclusions.First of all,the asset appraisers tend to use the income method as the evaluate method.Secondly,most of the asset appraisers choose three to seven years as the clear forecast period.Moreover,most of the risk premium is larger than 5% but less than 10%.Last but not least,the special risk adjustment coefficient is larger than 2% but less than 5%.In the meanwhile,as time goes on,the cash flow changes while the discount rate remains unchanged,which may have a negative effect on the accuracy of the result of the evaluation.We should improve the method to calculate the discount rate with the dynamic correction.Finally we can get the real discount ratio.Also,we can check whether it is better through a case.After analyzing,I found that the income method has three problems,the change of every parameter,parameter interaction and poor prediction accuracy of emerging industry The essay finally puts forward to enlarge the number of cases,build up the evaluation system of emerging industry and improve the ability of assets appraisers.I hope through this study will help to enhance the accuracy of asset appraisal.