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Mergers and acquisitions as a corporate strategy of external transactions of the most common mode of operation , with the gradual improvement of China's market economic system , the further reform of state-owned enterprises , the gradual establishment of a modern enterprise system and perfect, mergers and acquisitions under the conditions of market economy capital to core business , has become the trend of the development of enterprises . Chinese enterprises will expand in the next few years , a wave of mergers and reorganizations another round . In mergers and acquisitions , the valuation of the target company is one of the most critical issues in the M \u0026 A behavior , is the essence of M \u0026 A transactions , and the key to the success of M \u0026 A activity , is also the basis for bargaining . In the introduction section to clarify the significance of the valuation of the target company M \u0026 A of the study , and the research methods . First part of the body of knowledge of M \u0026 A research brief introduction, and then a review of domestic and foreign enterprises valuation methods and Research , four methods of replacement cost method of valuation of the target company , the relative valuation method discounted cash flow analysis and option valuation method , pointing out that each method has its scientific rationality defects and deficiencies , so the method selection to specific conditions and adapt to the selection and acquisition activities to achieve accurate and scientific assessment on the value of the target company . This paper focuses on a discounted cash flow valuation method , which determine the basic parameters of the discount rates , growth rates , cash flow , a more detailed analysis and in - depth exposition , also introduced the company in operating difficulties , periodic special case of non - listed companies use the discounted cash flow method , as well as mergers and acquisitions in the synergistic effect of the content and methods of computation . Finally, use a discounted cash flow valuation method to assess the value of the target company through actual cases verified for our current assessment of status , that should correctly understand the connotation of the target enterprise value assessment , improve the valuation of the environment , and vigorously cultivate evaluate talent .
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