%0 Journal Article
%T Discounted Cash Flow Model to Assess Company Value and Risk Considering Potential Synergistic Mergers and Breakups
%A Patrice G&#233
%A linas
%J Journal of Mathematical Finance
%P 233-243
%@ 2162-2442
%D 2025
%I Scientific Research Publishing
%R 10.4236/jmf.2025.152010
%X Traditional discounted cash flow (DCF) models often fail to capture the full value of a business. This is often noticeable when firms sell at unexpected premiums. The discounted cash flow model introduced by G&#233;linas [1] addresses this gap by incorporating the potential synergies created when a company&#8217;s assets are acquired by another firm (DCF<i><sub>Synergies</sub></i> or 2.0 as the author labeled). This paper extends DCF<i><sub>Synergies</sub></i> by examining the further added value and risk implications of structuring a business for segmented sales (DCF<i><sub>Segmented</sub></i>), where different buyers acquire different parts of a firm, unlocking higher synergies than a single buyer could, which could explain even greater acquisition premiums. We also introduce standard deviation analysis to quantify valuation uncertainty and risk in both whole-firm and segmented sales. A numerical example illustrates how breaking a company into parts can result in higher valuation and lower risk-adjusted uncertainty than a whole-firm sale. We also present a recent case study that is consistent with our findings.
%K Discounted Cash Flow Valuation
%K Corporate Restructuring
%K Segmented Valuation
%K Synergy Valuation
%U http://www.scirp.org/journal/PaperInformation.aspx?PaperID=142461