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4.3 Valuation of acquisitions and mergers: problem of overvaluation; valuation models- ‘Book value-plus’ models, Market based models, cash flow models; apply appropriate methods, such as: risk-adjusted cost of capital, adjusted net present values and changing price/earnings multipliers resulting from the acquisition or merger, to the valuation process where appropriate Prediction of a takeover target: criteria for choosing an appropriate target for acquisition
Valuation of acquisitions and mergers is a critical aspect of the process to determine the fair price and potential value of the target company. However, the problem of overvaluation is a common concern. Various valuation models and methods can be employed to address this issue and ensure a more accurate assessment.
