Mergers and Acquisitions: A Review of Valuation Methods
Professor Nurhan AYDIN, PhD

Abstract
Globally, mergers and acquisitions (M&A) have grown dramatically in recent years. M&A offer companies the opportunity to grow rapidly and successfully. One of the most critical elements in M&A is the valuation of companies as the success of an M&A is closely related to determining the fair value of the companies. Determining the value of a company is one of the most complex and difficult subjects in financial management. Corporate executives face many choices and complications as they try to assess a company’s value. There are a variety of ways to value a company. In this study I discussed the main methods of business valuation and I analyzed how to use the Discounted Cash Flow Method in M&A. This Method determines a company’s current value according to its estimated future cash flows and is often used in the valuation of companies. Finally I tried to determine which method would be appropriate in an M&A.

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