Business Valuation Techniques for Mergers and Acquisitions

Abstract

Business valuation plays a critical role in mergers and acquisitions (M&A), where an accurate assessment of a company's value determines the success of the transaction. This article explores various business valuation techniques utilized in M&A, including Discounted Cash Flow (DCF), Comparable Company Analysis (CCA), and Precedent Transaction Analysis (PTA). Each method is evaluated for its advantages, challenges, and applicability in different scenarios. Additionally, the impact of market conditions and company-specific factors are examined, offering insights into the strategic decision-making processes in M&A transactions. The findings highlight the importance of selecting appropriate valuation methods based on the context of the merger or acquisition.