Traditional Models and Real option Application for Companies' Merger and Acquisition -A Case Study of Acer Acquiring Gateway
Abstract The purpose of this dissertation is to discuss the application of real option approach and technique used in valuing an acquisition project. Various valuation models based on the traditional Discounted Cash Flow approach are introduced in the paper, together with their limitations. The opt...
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| Format: | Dissertation (University of Nottingham only) |
| Language: | English |
| Published: |
2007
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| Online Access: | https://eprints.nottingham.ac.uk/21417/ |
| _version_ | 1848792245137833984 |
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| author | ZHOU, SI |
| author_facet | ZHOU, SI |
| author_sort | ZHOU, SI |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | Abstract
The purpose of this dissertation is to discuss the application of real option approach and technique used in valuing an acquisition project. Various valuation models based on the traditional Discounted Cash Flow approach are introduced in the paper, together with their limitations. The option theory is also explained, and then was extended to real option.
A case study of Acer Inc. acquiring Gateway Inc. in 2007 is adopted to examine the application of the real option theory in the company valuation approach. In which, the process includes valuating by traditional DCF models, a theory based discussion about embedded options with the acquisition, a simple example of abandon option and a real option example of valuing firm's equity value as a call option.
We highlighted the assumptions and limitations of our evaluation and analysis for Free Cash Flow to Equity model and the real option approach, both in the introduction and in the conclusion. Further recommendations and study areas are also proposed at the end of the paper. |
| first_indexed | 2025-11-14T18:41:20Z |
| format | Dissertation (University of Nottingham only) |
| id | nottingham-21417 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T18:41:20Z |
| publishDate | 2007 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-214172018-02-16T07:57:20Z https://eprints.nottingham.ac.uk/21417/ Traditional Models and Real option Application for Companies' Merger and Acquisition -A Case Study of Acer Acquiring Gateway ZHOU, SI Abstract The purpose of this dissertation is to discuss the application of real option approach and technique used in valuing an acquisition project. Various valuation models based on the traditional Discounted Cash Flow approach are introduced in the paper, together with their limitations. The option theory is also explained, and then was extended to real option. A case study of Acer Inc. acquiring Gateway Inc. in 2007 is adopted to examine the application of the real option theory in the company valuation approach. In which, the process includes valuating by traditional DCF models, a theory based discussion about embedded options with the acquisition, a simple example of abandon option and a real option example of valuing firm's equity value as a call option. We highlighted the assumptions and limitations of our evaluation and analysis for Free Cash Flow to Equity model and the real option approach, both in the introduction and in the conclusion. Further recommendations and study areas are also proposed at the end of the paper. 2007 Dissertation (University of Nottingham only) NonPeerReviewed application/pdf en https://eprints.nottingham.ac.uk/21417/1/MA_Dissertation.pdf ZHOU, SI (2007) Traditional Models and Real option Application for Companies' Merger and Acquisition -A Case Study of Acer Acquiring Gateway. [Dissertation (University of Nottingham only)] (Unpublished) Real Option Merger and Acquisition |
| spellingShingle | Real Option Merger and Acquisition ZHOU, SI Traditional Models and Real option Application for Companies' Merger and Acquisition -A Case Study of Acer Acquiring Gateway |
| title | Traditional Models and Real option Application for Companies' Merger and Acquisition
-A Case Study of Acer Acquiring Gateway |
| title_full | Traditional Models and Real option Application for Companies' Merger and Acquisition
-A Case Study of Acer Acquiring Gateway |
| title_fullStr | Traditional Models and Real option Application for Companies' Merger and Acquisition
-A Case Study of Acer Acquiring Gateway |
| title_full_unstemmed | Traditional Models and Real option Application for Companies' Merger and Acquisition
-A Case Study of Acer Acquiring Gateway |
| title_short | Traditional Models and Real option Application for Companies' Merger and Acquisition
-A Case Study of Acer Acquiring Gateway |
| title_sort | traditional models and real option application for companies' merger and acquisition
-a case study of acer acquiring gateway |
| topic | Real Option Merger and Acquisition |
| url | https://eprints.nottingham.ac.uk/21417/ |