![]() These classic methods are discussed and a comparison is drawn among these techniques in regard to practicability. Chapter 2 presents traditional evaluation methods of static net present value, sensitivity analysis, Monte Carlo and decision tree. Furthermore, the process and the different phases of a merger or an acquisition are explained. In chapter 1, the term Mergers & Acquisitions (M&A) is defined and the motives as well as the relevance of M&A transactions for different branches are described in detail. However, the use of present values and capitalized values may produce pitfalls in acquisition decisions as strategic investment decisions might be characterized by a wide range of possibilities to react flexibly to a fast changing environment. Therefore, the Real Options approach has been applied very rarely as it has the reputation of high complexity and poor practicability in daily business. For example, future cash-flows are discounted with a fixed risk-adjusted discount rate. There has been an intensive scientific discussion in the past years about the Real Options method for the evaluation of investments and mergers & acquisitions as in practice usually the management tries to capture future developments with static methods of capital budgeting. Inhaltsangabe:Abstract: The objective of this dissertation is to examine the application of Real Options for the evaluation of companies with regard to acquisitions. Mergers Acquisitions A Real Option Valuation Approach Of Investment Decision Under Uncertainty by Marc Zajicek Considered one of the greatest innovations of modern finance, the real options approach is based on Nobel-prize winning work by three MIT economists, Fischer Black, Robert Merton, and Myron Scholes. Whereas the traditional decision tools such as discounted cash flow/net present value (DCF/NPV) analysis assume a “fixed” path ahead, real options analysis offers more flexible strategies. This systematic approach to project valuation helps you minimize upfront investment risks, exercise flexibility in decision making, and maximize the returns. This title presents a step-by-step, practical approach to real options valuation to make it easily understandable by practitioners as well as senior management. The challenge lies in deciding what projects to choose, expand, contract, defer, or abandon, and which method of valuation to use is the key tool in the process. Project Valuation Using Real Options by Prasad Kodukulaīusiness leaders are frequently faced with investment decisions on new and ongoing projects. The aim of this study is to investigate the real options approach for its suitability as a business valuation method and to identify its strengths and weaknesses. The crux of the extension is the evaluation of action flexibilities in the otherwise static method. With the ROA no independent valuation method is presented, but an extension of the familiar discounted cash flow method. ![]() For this period, the most of literature that deals with the real options approach comes from. In the boom times of the new economy around the turn of the century was said to have the ROA that it would be a concept that justifies artificial-ly increased corporate values. The real options approach, which was originally used only for the investment calculation can, also be applied to companies because the company valuation represents a special case of investment analysis. Nevertheless, there is a reporting date and the mutual influence of the variables can not be adequately represented. To better match the DCF method to the uncertain development of the future, various scenarios can be simulated with different parameters. This is especially true for young, innovative and dynamic company. The response to newly acquired information can not be taken into account and therefore lead to lower ratings from this approach and all other static approaches. This method is one of the static corporate policies. Most of these approaches are static calculation methods such as the discounted cash flow method. For the valuation of companies, various valuation methods are available. Seminar paper from the year 2013 in the subject Business economics - Business Management, Corporate Governance, grade: 1,6, University of Applied Sciences Essen, language: English, abstract: There are various events to which a company valuation must be created. We only index and link to content provided by other sites. Disclaimer: This site does not store any files on its server.
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