| dc.description.abstract | As companies expand their scale through mergers and acquisitions, how to evaluate the
rationality of merger and acquisition prices has become a key issue. A reasonable acquisition
price directly affects the interests of shareholders, so the evaluation of the acquisition price is
crucial. This study will explore the benefits of Kaifa Financial Holdings’ complete acquisition
of China Life, and further analyze whether the actual purchase price of Kaifa Financial
Holdings’ third acquisition of China Life is reasonable. To this end, this study uses two
evaluation methods： the market method （including the price-to-earnings ratio method and
the stock price-to-net value ratio method） and the income method （mainly the discounted
cash flow method） to calculate the value of the enterprise, and comparatively analyzes the
impact of these methods on Applicability of the actual purchase price.
According to empirical results, the income method （discounted cash flow method）
can be closer to the actual acquisition price, showing that its application effect in M&A cases
is more accurate. In addition, when further comparing the weighted average cost of capital
（WACC） of peers, it was found that the size of WACC has an inverse relationship with the
impact of corporate value. Specifically, when WACC is higher, the enterprise value is lower;
when WACC is lower, the enterprise value is larger. This shows that WACC, as a key indicator
for evaluating corporate value, has a significant impact.
In addition to WACC, growth rate is also an important factor in assessing corporate
value. Research has found that there is a positive relationship between growth rate and
corporate value. The higher the growth rate, the greater the corporate value; conversely, when
the growth rate is low, the corporate value is relatively small. Therefore, the impact of WACC
and growth rate on corporate value cannot be ignored, and these factors need to be fully
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considered in the actual merger and acquisition evaluation process.
To sum up, the income method shows high applicability in this study, and the impact of
WACC and growth rate on corporate value reveals the core factors that need to be paid
attention to in M&A evaluation. These findings not only have reference significance for
developing cases of financial holdings’ mergers and acquisitions of China Life, but also
provide theoretical support for the evaluation of similar mergers and acquisitions cases in the
future. | en_US |