Abstract
Abstract Most companies have a top-down decision making process that leaves little room for discussion. Work is implemented only after receiving orders from the top-level authorities. The objective of this study is to re-examine whether the utilization of Analytic Hierarchy Processes (AHP) can change existing decision-making structures and results, the results would be a useful reference for future decisions of various companies. We also hope that the intuitive decision-making methods of AHP can also incorporate structural questions. These questions can undergo further discussion or validation. Another objective is to understand the method adopted for market value methods for the evaluation of stock options owned by companies during a merger, and what type of conversion ratios would be used as a result. Our results agree with the decisions made by companies. Since the Xinzhu plant of Viking Tech Corporation is already filled to capacity, they would need an existing plant to expand their production. Thye Ming Industrial Co. happened to own plants in both Kaohsiung (in Taiwan) and Wuxi (in mainland China). These plants could be the solution for production issues and local sales taxation in the mainland faced by Viking Tech Corporation. Hence, more value was given to these plants when weighing the advantages. The purchase-merger with the mainland plants was given a higher priority due to advantages in labor, production and materials cost. Next, during stocks exchange, market comparison and discounted cash flow technique in addition to Gorden Model was used to give an exchange rate between 3.89∼15.35. The difference between the minimum and maximum estimates was extremely significant with the maximum value a full four folds of the minimum. During the time of sampling, the price-to-earnings ratio (PER) of Thye Ming Industrial Co. was already at 88.7, with market value estimates giving a value of NT$ 2.66, largely due to the exceedingly low profit margin of each stock. Hence, when using the market value method to calculate the conversion ratio, we should take care to remove the extreme estimates to provide a useful and accurate reference value. At the same time, via a paired comparison method in AHP to weigh the factors considered when arriving to a decision, it is evident that decision-making processes are strongly affected by the background of the decision makers and their personal objectivity, both of which strongly influences the decisions they will arrive upon. Hence, before a decision is made, it is advised to discuss, consider and weigh the various factors as a group. This will help to avoid bad decisions resulting from incomplete information or personal inclinations. Keywords: Analytic Hierarchy Processes, Market Value Method, Discounted Cash Flow Method, Gordon Model, Merger