Valuation Income Approach In Overseas Merger And Acquisition Of Listed Companies

Nowadays,with China’s economy development,the more active capital markets,the upcoming IPO restart,the quantity and amount of mergers and acquisitions of listed companies have reached an unprecedented height.Under the background of economic globalization,the quantity and amount of Chinese enterprises in overseas mergers and acquisitions continued to rise.Therefore,factors in overseas enterprise valuation method related improvements,so that the income approach can be combined with the characteristics of the local market.Firstly,overseas acquisition of M & A and development status were analyzed,then commonly used method of business valuation are introduced.And also I introduces why choose the income approach to assess the underlying assets overseas acquisitions.After introduces a key factor in Valuation Income Approach — discount rate,an improved optimization model based on the original three-factor model beta value are introduced.Considering the company’s overseas M & A target mostly unlisted and have growth potential,its market value is difficult to estimate,so I choose the investment scale of the factors that replace the traditional book to market factor.After given the empirical analysis of data in the US this overseas market from 1963 to 2014,I prove the improved three-factor model,combined with the size of the US market,increasing investment scale of the elements,under certain conditions,to estimate the discount rate.Through the latest case of the United States the target enterprise application to demonstrate that the improvement of three-factor model is more useful and closer to the market method.I really hope this thesis can provide some new ideas to the Valuation Income Approach in overseas merger and acquisition of listed companies.