Methods of Valuation for Mergers and Acquisitions
18 Pages Posted: 21 Oct 2008 Last revised: 10 Nov 2021
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Methods of Valuation for Mergers and Acquisitions
Methods of Valuation for Mergers and Acquisitions
Abstract
This note addresses the methods used to value companies in an M&A (mergers and acquisitions) setting. It provides a detailed description of the discounted-cash-flow (DCF) approach and reviews other methods of valuation such as book value, liquidation value, replacement cost, market value, trading multiples of peer firms, and comparable transaction multiples.
Excerpt
UVA-F-1274
Rev. Mar. 19, 2018
Methods of Valuation for Mergers and Acquisitions
This note addresses the methods used to value companies in a merger and acquisitions (M&A) setting. It provides a detailed description of the discounted-cash-flow (DCF) approach and reviews other methods of valuation, such as market multiples of peer firms, book value, liquidation value, replacement cost, market value, and comparable transaction multiples.
Discounted-Cash-Flow Method
Overview
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Keywords: mergers and acquisitions, valuation
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