Economic Themes (2010) 48 (1) 8, 105-116
Vladimir Dženopoljac
Abstract: The quality of strategic decision-making process depends on the quality of basic decision inputs. In terms of investment decision-making process, the quality of decision inputs is determined by the adequately evaluated value-creation potential of certain investment alternative. The acquisition of a company can be treated as an investment. In order to properly evaluate the value-creation potential of such an investment it is necessary to assess the value-creation potential of the target company and its alignment with strategic future of acquiring company. We will present two contemporary methods relevant for this field, real options technique, which promotes the concept of strategic learning and management decision flexibility, and method based on economic value added, which represents widely used modern performance measure within corporations.
Keywords: valuation; acquisition; real options; economic value added
CONTEMPORARY TARGET COMPANY VALUATION METHODS IN THE ACQUISITON PROCESS
Vladimir Dženopoljac
Abstract: The quality of strategic decision-making process depends on the quality of basic decision inputs. In terms of investment decision-making process, the quality of decision inputs is determined by the adequately evaluated value-creation potential of certain investment alternative. The acquisition of a company can be treated as an investment. In order to properly evaluate the value-creation potential of such an investment it is necessary to assess the value-creation potential of the target company and its alignment with strategic future of acquiring company. We will present two contemporary methods relevant for this field, real options technique, which promotes the concept of strategic learning and management decision flexibility, and method based on economic value added, which represents widely used modern performance measure within corporations.
Keywords: valuation; acquisition; real options; economic value added
