The document discusses various methods for valuing firms during mergers and acquisitions. It defines different types of mergers and provides a brief history of mergers and acquisitions in the United States. Common valuation models include balance sheet approaches like book value and liquidation value, as well as dividend discount and cash flow models. The valuation process involves analyzing historical performance, forecasting financials, estimating the cost of capital, and calculating and interpreting the results. An example case of the HP-Compaq merger is also reviewed.

1. VALUATION OF FIRMS IN MERGERS AND ACQUISITIONS

20. HP-COMPAQ MERGER CASE