Research On Equity Pricing In M & A Of Media Industry

Asset pricing is the hot issue of the capital market,especially in the context of Chinese enterprises are keen on equity financing,the rational pricing of corporate equity has become one of the main concerns of enterprise,investors and regulators.Whether the result of corporate equity pricing is reasonable,not only relates to the interests of equity holders,market investors,but also relates the relevant trading mechanism in the capital market.In the past three years,the unicity and high premium are the most important two characteristics in the equity pricing of the equity transactions in the media industry.In the recent three years,almost all of the media business were using benefits method in the final equity pricing.But the study of nearest three years of the media business equity transaction evaluation report shows that the benefits method has two obvious problems.First,in the same conditions,the market risk premium estimation vary dramatically.Second,the assignment of the specific risk factor had lost touch with reality.The status of mergers and acquisitions in the media industry can be summed up in one sentence: the unicity of the valuation method.Almost all of the pricing were using benefit method,while the method itself contends few huge problems.In this paper,we put our main focus on the current situation of the equity pricing of the media industry in recent years,combined with the typical case of Focus Media,we are trying to achieve two purposes: first,according to the existing theory to improve the market method,and presented by the specific case to offer more choices in the equity pricing process in the media industry;Second,we are going to analyze the existing problems in the benefit method and revise the model to improve the efficiency during the pricing process.The biggest innovation of this paper is to improve the market method,through adding the enterprise performance evaluation system into market method,we can use the financial data to compare the difference between those companies,which is hard to identify at first.The new method this paper putting forward has improved the market method in both theoretically and practically.Secondly,this paper points out the problems existing in the equity pricing by the benefit method of the Focus Media,and corrects the valuation model of the benefit method.The paper also compares the effectiveness of different pricing methods by tracking the market performance of the enterprises.