Valuation Techniques - Mergers & Acquisitions
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What are some of the valuation techniques commonly used in Mergers & Acquisitions? Compare and contrast the valuation techniques common to Mergers & Acquisitions activities. What is the purpose of having valuation techniques when pursuing a particular Mergers & Acquisitions strategy?
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The expert creates valuation techniques and mergers and acquisitions.
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Some of the valuation techniques are -
1. Discounted cash flow technique - in this technique we estimate the free cash flows of the company we wish to acquire and discount these cash flows using the required rate of return to calculate the value of the acquired firm. This gives an idea of what the firm is worth. The difficulty with this technique is in estimating the cash flows since we are looking at the future and also the correct discounting rate to use.
2. Multiples technique - in this technique we do ...
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