Hezagonal Model for Firm Valuation:Applied Case in Phelps Dodge Acquisition by Freeport McMoran Copper & Gold (FCX)
The most important aspect of Merger and Acquisition (M&A) is value.For the acquired concern,value is the purchase price,as defined in the competitive market.For the acquirer,its the future company when combined,modified or restructured,which may be in terms of profit,resale or marketability.While there are many types of valuation framework,the hexagonal valuation model - which was first introduced by Ralph Demsky,the chairman and CEO of EG Corporation - is selected as the main framework in this research.The hexagonal model consists of 6 stages of firms valuation which are:(1) current market value,(2) value as-is,(3) value with internal improvement,(4) value with internal improvement and disposal/acquisition,(5) value with growth,internal improvement and disposal/acquisition,(6) value with financial engineering,growth,internal improvement and disposal/acquisition (total potential value)To make the hexagonal model operational,it will be equipped with enterprise DCF (discounted cash flow) method.The value at risk (VAR) method will be adopted to deal with market uncertainties that can introduce risk in the valuation variables.The binomial option pricing with decision tree method will be used to value projects and decisions with flexibility.All of these framework and methods will be applied into real acquisition case of Phelps Dodge by Freeport McMoRan Copper and Gold in 2007.
hezagonal valuation model DCF (discounted cash flow) method VAR (Value at Risk) and option pricing with decision tree method
Wiryono,Sudarso Kaderi Raharjo,Aris Wahyu
School of Business & Management,Bandung Institute of Technology School of Business and Management-Bandung Institute of Technology
国际会议
PAN-PACIFIC CONFERENCE XXVI(“战略创新、协作融合泛太平洋管理学会第26届年会)
深圳
英文
315-317
2009-06-01（万方平台首次上网日期，不代表论文的发表时间）