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In this thesis, the major purpose focuses on estimating the value of an enterprise. The price per share of SPIL stock is evaluated with "discounted cash flow (DCF) method" and "price-to-earning ratio method" by reference to the public financial data. The calculated prices will be compared with the prices that ASE purchased stakes of SPIL in 2015. Based on the analyses, the reasonableness of price in the case of ASE-SPIL takeover bid will be checked up in the research.
According to the result, it was quite obvious that the value of an enterprise is susceptible to weighted average cost of capital (WACC) and FCFF growth rate "g" when DCF method was adopted. The two parameters "WACC" and "g" are taken into consideration for a subtle analysis. Finally, the share price range calculated by DCF method includes the real price that ASE offered. It is thus clear that DCF method is practical for making an evaluation of a corporate. Additionally, another approach being employed in this study, "price-to-earning ratio method", averaged the P/E values of six similar companies and computed SPIL stock price. The calculated price is quite close to the purchase price. It is perceived that "price-to-earning ratio method" is a useful method even though it is very simple one to be applied. These analyses had proved that in the case of ASE-SPIL takeover bit, the matter of price is reasonable.
Moreover, it is found in this study that the EVA spread of these two companies are both positive. If the two corporations consistently make a considerable investment, the growth will lead to a larger profit. On May 26, 2016, ASE and SPIL had reached an agreement to set up a holding company. The further discussion in this thesis would be centred on the issue that whether or not the synergy could be achieved, from which immense benefit is expected to be brought after ASE and SPIL work in close collaboration.
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