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| Author: | Madura, J. Vasconcellos, G. M. Kish, R. J. |
| Title: | A valuation model for international acquisition. |
| Journal: | Management Decision
1991 : VOL. 29:4, p. 31-38 |
| Index terms: | MERGERS CAPITAL BUDGETING VALUATION |
| Language: | eng |
| Abstract: | The proliferation of mergers during the 70s and 80s has generated voluminous amounts of research with a primary focus on the impact to the shareholders from both the acquired and the acquiring firms. Relatively little research has been placed on the valuation process itself, especially within the international merger setting. It is shown that acquisitions, divestitures, and leveraged buy-outs may all be based upon an asset valuation model. A review of literature is provided. A capital budgeting approach is applied to determine whether the net present value of the acquisition is positive. Several factors affecting the feasibility of cross-border mergers and acquisitions are investigated. Risks and uncertainties are also considered. |
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