Relative Performance of Valuation Using Multiples. Empirical Evidence on Bucharest Stock Exchange
Relative Performance of Valuation Using Multiples. Empirical Evidence on Bucharest Stock Exchange
Author(s): Dragoş Ioan MinjinaSubject(s): Economy, Financial Markets
Published by: EDITURA ASE
Keywords: multiples; comparables; relative valuation; equity valuation; capital markets;
Summary/Abstract: This paper examines the valuation performances of seven multiples on a sample of BSE-listed firms. When industry membership is used as the selection method for comparable firms, the P/CF multiple leads to the best valuation performance. P/E, P/B, P/CF and P/TA multiples assure the highest accuracies when ROE is used as the selection method for comparable firms. In the case of both selection methods of comparables, the P/S multiple leads to the least accurate valuation. In this study, accuracy levels of multiple valuations are generally lower than those obtained using the same methods on more developed capital markets.
Journal: The Review of Finance and Banking
- Issue Year: 1/2009
- Issue No: 1
- Page Range: 35-53
- Page Count: 19
- Language: English