| Summary: | 碩士 === 國立清華大學 === 經營管理碩士在職專班 === 105 === The main goal of this thesis is to utilize Discounted Free Cash Flow (DFCF) approach and P/E ratio approach to estimate the stock price of Inotera Memories Inc to validate the acquisition price in the merger and acquisition case of Inotera and Micron in 2016.
Through literature review, DFCF approach demonstrates great capability of estimating and representing business value. Thus, this thesis adopts DFCF and P/E ratio approach to assess business valuation in research study case : merger case of Inotera and Micron.
From the analysis of this thesis, the estimated value range by using P/E ratio approach covers the actual acquisition stock value, 30. This estimation is calculated using P/E ratio data of eight quarters of two similar DRAM companies and Inotera itself. On the other hand, another estimated value range is derived using DFCF approach with the data of Weighted Average Cost of Capital (WACC) and sensitivity analysis of Free Cash Flow (FCFF) growth rate "g". The second estimated value range of DFCF also covers the actual acquisition value, 30. Thus, DFCF and P/E ratio approaches can derive reasonable and suitable estimated value in the merger case of Inotera and Micro.
Moreover, in acquisition cases, the factors that affect acquisition values are not only financial information but also industrial relations, labor relations, business philosophy of operators and many other non-quantifiable factors. In December 2016, the two companies completes merge and it is hoped that Micron keep increasing its business competiveness and values.
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