This assignment will build upon the assumptions for the projected pro forma financial statements you developed in your Week 3 assignment (attached). It will apply various risk analysis techniques and strategies to determine the appropriate rate of return for discretionary cash flows; it will examine the different ways of minimizing potential risk in a merger or acquisition transactions; it will compare and contrast how various companies identify and mitigate liabilities in pre-and post-mergers and acquisitions. Using the concepts from this course and other related scholarly and/or professional sources, you will prepare a five to seven-page report addressing how the various risk analysis techniques are used.

The assignment must include the following elements:

Analyze various business valuation techniques and explain how your acquiring company will determine the appropriate rate of return (discount rate or capitalization rate) to apply against the prospective discretionary cash flows anticipated from their acquisition.

Examine and summarize the various risk management methods used in your acquiring company’s due diligence process.

• Compare and contrast the procedures that will be used to uncover the various potential risks and liabilities for the target company in order to implement a strategy for integration and ensure a solid foundation for ongoing regulatory and internal compliance.
• Explain how your acquiring company will identify and mitigate liabilities in the pre- and post-merger risk assessment process.
• Compare and contrast how the target company’s risk analysis methods are similar to a post-merger or acquisition company within its industry.