Choice approach to the valuation of the financial institution in М&A contracts using the analytic hierarchy process

Abstract

Purpose and subject of researchThe purpose of research is rationale for the choice approach to valuation of financial institutions, the most appropriate in mergers and acquisitions. The object of study is the choice of approach to valuation of financial institutions in mergers and acquisitions.Research methodologyThe study used the methods of valuation of financial institutions that are legislated inUkraine, namely: cost, comparative and revenue.Value resultsThe relevance of the topic chosen is usually in the works of scholars choice approach to valuation is based on logical reasoning without the use of specialized tools for decision making. According to the National Standard number 1 "General Principles of valuation of property and property rights" inUkrainelegislated mandatory application of the income, expenditure and comparative approaches to assessing the value of any object. Therefore, the question of choice reasoned approach to the valuation of financial institutions in mergers and acquisitions are opened.ConclusionsThe results of the study concluded that, if necessary, to take account of mergers and acquisitions investment value of the financial institution objectives as an integrated facility and its development potential is the most appropriate evaluation procedures focus on methods of income approach.Although he has a number of shortcomings of traditional methods of valuation, however, is the most appropriate contractual M & A, takes into account the valuation of financial institutions in mergers and acquisitions and can be the basis for further research in the area of valuation of financial institutions in mergers and acquisitions.Key words: financial institution, М&A contracts, analytic hierarchy process, mergers and acquisitions.