A Case Study Of JZL Corporate Value Assessment Based On Improved Discount Rate

The asset-based approach,market approach,and income approach are three basic approaches to asset valuation.The income approach is most widely used in enterprise value evaluation for it represents the value of a company's ongoing operations.However,the three parameters involved in the income approach: free cash flow,discount rate,and payoff period all require assessment agencies and appraisers to make predictions.There is strong subjectivity,especially the determination of the discount rate,though it just changes a little,it will cause great differences in the assessment results,which have a significant impact on the rationality and accuracy of the assessment results,and thus it becomes the key to use the income law.This paper focuses on the problems existing in determining the discount rate by using the income method to evaluate the company's value.Taking the JZL cross-border e-comerce company as an example,an improvement study was conducted.First of all,this paper uses the traditional income method to evaluate the total equity value of JZL company shareholders,and then analyzes the evaluation results,and proposes the defects in determining the excess risk return ERP and the risk parameter ? value in the traditional income method.Then,the JZL company's entire equity value is assessed by using the income method with improved discount rate.Among them,for the determination of the excess risk return(ERP),we borrowed from the methods used by the relevant U.S.departments when determining the excess risk return(ERP),and conducted statistical analysis on relevant data in the Chinese market to reduce the impact of stock market fluctuations and establish the relationship between the equity risk rate of return(Rm)and the risk-free rate of return(Rf).For the risk parameter ? is worth determining,we use the Blooms adjustment method and adjust it by using Bloom's adjustment formula,so that it can reflect the risk level of future earnings better.After analyzing the evaluation results which used the improved discount rate,the study concludes that the discount rate determined by the improved method is more stable and reasonable than the determination of the discount rate in the traditional income method.Finally,it points out the application of the determination ofcompany-specific risk RS and ? adjustment formula in the company,at the same time,it also points out the deficiency in empirical analysis and make a vision.It also hopes that in the future research,more in-depth research can be conducted to make up for the deficiencies of this paper,And try to make a little contribution to the development of the industry.