Evaluation Of Enterprise Merger Value Based On Option Game

With the rapid development of China's market economy,mergers and acquisitions(M&A)as an effective way to expand the scale of enterprises,has become a common occurrence in the modern enterprise management.In the process of enterprise mergers and acquisitions,the evaluation of the value of the target enterprise is an important work in the early stage of M&A,which is related to the success or failure of M&A transactions.However,the existing enterprise value evaluation method in enterprise value assessment of target enterprise M&A target enterprise in the future or they do not consider the management of uncertainty of option value,or consider the option value,and ignore the wreck caused by M&A both sides of the negotiations on the premium and premium allocation problem,lead to the existing evaluation methods exist in the value assessment of target enterprise value too low or too high.So this article combines the real option theory and game theory,option game model is established to evaluate the value of target enterprise in M&A,value evaluation of current enterprise M&A do certain correction method.This paper first studies the applicability of the existing enterprise mergers and acquisitions valuation method and the advantages and disadvantages.Cost method to get the value of the book value,market value and the liquidation value.Market comparison method is to use price multiplier p/e ratio(PE),price-to-sales ratio(PS),price-to-book(PBV)to assess the value of target enterprise.When the earnings of the enterprise are negative,PE loses its meaning.DCF model method is used more and more mature.All three methods are based on the assumption of rigid investment,while the real option method is based on the elastic decision,considering the option value in the enterprise merger and acquisition activity.The combination of theory of game theory and option theory is studied.The real option method does not consider the game process and premium distribution of the two parties.Option game,the game and consider premium is assigned a mutually acceptable premium distribution factor,to get more precise value of the target enterprise.The combination of game theory and option theory corrects the real option method.The last build option game model is studied and its application.Both analog acquisition through three rounds of the game process,the premium that is satisfactory for both distribution factor,option game model was established And through the specific case of application of this method makes a preliminary study.This paper studies concluded that:(1)Option games method is compared with other four methods in terms of fixed investment not only rigid assumptions,considering the flexible investment option value.At the same time also to consider the allocation of the acquisition premium.Make the enterprise mergers and acquisitions value more in line with the actual circumstances of the mergers and acquisitions,better to avoid the problems of the merger and acquisition value too low or too high,provides better reference value for both sides.(2)Through case analysis to know the model of enterprise merger and acquisition value in the traditional methods and real options method between the results,to solve the problem of enterprise merger and acquisition value is too low or high provides a train of thought.For both parties involved in the M&A activity: the target enterprise can avoid the low evaluation value and make itself suffer losses in the M&A.For main and side as an investor,the theoretical model under the investment value evaluation purpose can have on the investment value of more reasonable,avoid to pay high cost of investment,investors to avoid unnecessary loss in the M&A activities,get the biggest benefit.