A Study On The Impact Of Merger And Acquisition On The Capital Cost And The Subsequent Enterprise Value

Automobile Industry has been through bottleneck period.Excessive production captivity and consumer recession comes into being incompatible contradiction.The health development of domestic automobile industry has been impeded due to urban traffic congestion disease as well as extensive traffic management.The domestic automobile manufactures is currently lack of core manufacturing techniques known as three major car component,and the majority of them is seeking to explore another path to revolutionize their production lines.Currently,oversee merge and acquisition is now regarded as the best chance to achieve the goal of corner overtaking in the automobile industry by importing new technique and car platform.A great many private enterprises involve themselves in oversee M&A battle,such as Geely Automobile.As one of excellent private automobile enterprises,Geely Automobile's success arose from acquisition of Volvo automobile.which laid the profound foundation of most renowned car brand in China and enhances brand images.Ultimately,Geely Automobile has become one of best car-purchasing options among self-own domestic car brands.In the dissertation,rational thinking is made to analyze how M&A associated with payment methods influences the enterprise value through discounted free cash flow method.The case of Geely Automobile M&A is put much emphasis on a logical connection between capital cost and M&A payment method in order to prove that discounted free cash flow method can be applicable to M&A cases at decision-making level.The dissertation is concluded that the case of Geely M&A along with 1.3 billion cash and 0.2 billion worth of notes can be conducive to enterprise development on the basis of discounted free cash flow method(DCF).Additionally,in practice,DCF model is recognized as the ideal tool to analyze whether M&A associated with corresponding payment method is feasible in terms of enterprise development.