| dc.description.abstract | With the increasingly competitive business environment and the globalization trend, some companies may use business acquisition as the means to expand market share, increase productivity,obtain strategic raw material/technology, or to obtain complete vertical integration, with the goal of improving shareholder value. Therefore, the purchasing company must be able to determine the proper value of the target.
In our research, we will use the case study of 2019 WPG HOLDINGS LIMITED acquired WT Microelectronics Co., Ltd. We used the discounted cash flow model, price-to-earning ratio,
dividend growth model, and price-book ratio, to determine whether the purchase price of WT Microelectronics Co., Ltd. was reasonable.
The discounted cash flow method ( DCF ) is based on the assumption of the company′s sustainable operation, considering the theoretical basis of the company′s growth and risk factors, to obtain the value of the company′s per share target. The price-to-earning ratio method is to select the price-to-earnings ratio of the major semiconductor channel distributors in Taiwan to convert the
value of the acquired company per share. The dividend growth model is the dividend and shareholder equity return rate paid by the target company to determine the intrinsic value of the stock and then the value per share. The final case then calculates the reasonable stock price using the
stock equity method. This case study confirmed by the above method that the purchase price of the shares of WT by WPG does have a reasonable basis for the purchase price. | en_US |