The Pricing Model in the Foreign Mergers and Acquisitions of State-Owned Shares Based on Residual Income Valuation Model and Real Option Pricing Method

Abstract

How to get the real value of State-owned enterprises in foreign mergers and acquisitions activity, which directly affects not only the success of M&A(mergers and acquisitions) activity but also concerns the protection of national interests. The value of State-owned enterprises was divided into two parts, Self-value and M&A-added value in this paper by using RIV (residual income valuation) model and real options method. This paper used the data of Shenyang Commercial City for empirical analysis. Improvement of RIV model by DuPont analysis system, made more based financial data could be utilized. The real options method analyzed M & A-added value that can not be neglected in equity transfer activity.