Empirical Research On The Enterprise Value Evaluation On The Basis Of The Discounted Cash Flow Model

Enterprise value is a concept accompanied by the emergence of property rights market.With the developing of the property market and the establishment of management objectives of maximizing the value of the business, business valuation issues has gradually gained widespread attention in the theory and practice. Compared to the relatively mature theory of foreign enterprises value, there is still in the initial stage of exploration in the relevant areas of research in China. In business valuation practice, the international mainstream is discounted cash flow method.In this paper ,we attempt to combine with the reality of our country to explore the discounted cash flow valuation model for Chinese enterprises.Through the discussing of the commonly used business valuation methods,this paper highlights the popular valuation models in the international companies - discounted cash flow model. After comparative analysis, the discounted cash flow method is chosen to be the tool for determining enterprise value. This paper describes the applicationin of the discounted cash flow method in detail, deeply analyses the theory of discounted cash flow model and the problem of parameter selection in the model combined with our corporate and capital markets of the actual situation. The research selected the listed companies in the Shanghai Stock Exchange and Shenzhen Stock Exchange as a sample of 36 cities in China for this study, on the assumption that under certain conditions, through statistical analysis, the empirical results related to its market value test and fit test. The results show that the enterprise value obtained from cash flow discounted method are highly relevant to their market value and provides a useful reference by stduying the applications for business valuation of the cash flow model in China's capital market. Later on in this paper, the innovation of discounted cash flow model is discussed. Finally, the conclusion indicate some the deficiencies of the study and the prospects for future research.