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Abidoye, Rotimi Boluwatife, Ma Junge, Terence Y. M. Lam, Tunbosun Biodun Oyedokun, and Malvern Leonard Tipping. "Property valuation methods in practice: evidence from Australia." Property Management 37, no. 5 (October 21, 2019): 701–18. http://dx.doi.org/10.1108/pm-04-2019-0018.
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Purpose Improving valuation accuracy, especially for sale and acquisition purposes, remains one of the key targets of the global real estate research agenda. Among other recommendations, it has been argued that the use of technology-based advanced valuation methods can help to narrow the gap between asset valuations and actual sale prices. The purpose of this paper is to investigate the property valuation methods being adopted by Australian valuers and the factors influencing their level of awareness and adoption of the methods. Design/methodology/approach An online questionnaire survey was conducted to elicit information from valuers practising in Australia. They were asked to indicate their level of awareness and adoption of the different property valuation methods. Their response was analysed using frequency distribution, χ2 test and mean score ranking. Findings The results show that the traditional methods of valuation, namely, comparative, investment and residual, are the most adopted methods by the Australian valuers, while advanced valuation methods are seldom applied in practice. The results confirm that professional bodies, sector of practice and educational institutions are the three most important drivers of awareness and adoption of the advanced valuation methods. Practical implications There is a need for all the property valuation stakeholders to synergise and transform the property valuation practice in a bid to promote the awareness and adoption of advanced valuation methods, (e.g. hedonic pricing model, artificial neural network, expert system, fuzzy logic system, etc.) among valuers. These are all technology-based methods to improve the efficiency in the prediction process, and the valuer still needs to input reliable transaction data into the systems. Originality/value This study provides a fresh and most recent insight into the current property valuation methods adopted in practice by valuers practising in Australia. It identifies that the advanced valuation methods could supplement the traditional valuation methods to achieve good practice standard for improving the professional valuation practice in Australia so that the valuation profession can meet the industry’s expectations.
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Chen, Mingrui, and Yunting Ni. "Empirical Analysis of Financial Statement and Common Valuation Methods." BCP Business & Management 24 (August 10, 2022): 427–35. http://dx.doi.org/10.54691/bcpbm.v24i.1531.
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Business valuations are often used today by stakeholders to estimate the economic value of the benefits a business generates. In this case, financial market participants use a variety of valuation methods to determine the price they are willing to pay or accept to achieve a stock sale. Therefore, this paper conducts financial statement analysis and common valuation methods on the basis of Airbus annual report, and then evaluates some other factors that affect valuation. The study found that Airbus got rid of high leverage and implemented sustainable development in recent years. The stock price based on common valuation methods is lower than the market value. However, this paper believes that due to the current situation of Airbus and the capital market, the current market value is reasonable.
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French, Nick, and Laura Gabrielli. "Pricing to market." Journal of Property Investment & Finance 36, no. 4 (July 2, 2018): 391–96. http://dx.doi.org/10.1108/jpif-05-2018-0033.
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Purpose Since the global financial economic crisis hit the world markets in 2007/2008, the role of property valuation has been under greater and greater scrutiny. The process of valuation and its quality assurance has been addressed by the higher prominence of the International Valuation Standards Council (IVSC). This is a significant initiative worldwide. However, there has been little written on the appropriate use of valuation approaches and methods in market valuations. There is now a hierarchy of valuation definitions. In order, there are valuation approaches, valuation methods and, as a subset of the methods, techniques or models. The purpose of this paper is to look at the importance of identifying the appropriate approach to be adopted in market valuations and the methods, techniques and models that should be applied to determine market value. Design/methodology/approach This practice briefing is an overview of the valuation approaches, methods and models available to the valuer and comments on the appropriateness of valuation each in assessing market value. Findings This paper reviews the IVSC-recognised approaches and prompts the valuer to be careful with the semantics involved so that they are better placed to provide an unambiguous service to their clients. Practical implications The role of the valuer in practice is to identify the appropriate approach for the valuation of the subject property, choose the right method and then apply the correct mathematical model for the valuation task in hand. Originality/value This provides guidance on how valuations can be presented to the client in accordance with the International Valuation Standards.
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Smrčka, Luboš, Eva Kislingerová, Jiří Strouhal, Klára Kubíčková, and Markéta Kubíčková. "Valuation of Cultural Goods: Evaluation of Perspective Methods." International Journal of Entrepreneurial Knowledge 2, no. 2 (December 1, 2014): 45–56. http://dx.doi.org/10.1515/ijek-2015-0005.
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ABSTRACT Valuation of cultural assets represents a very actual topic not widely discussed within contemporary accounting and financial research. Main motivation of this paper is therefore to provide an empirical evidence of the methods for valuation of cultural and artistic goods. In general, any method for valuating cultural and artistic goods or institutions cannot bring results as objective as those available to valuate assets in the real market economy. Within this paper we did focused on valuation on a specific case of cultural institutions (theatre, museum) and also we aimed to analyse the economic impacts of cultural organizations.
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Heller, J., and Daria Zlachevskaia. "Is it possible to improve methods of intellectual property valuation?" Zeszyty Teoretyczne Rachunkowości 45, no. 2 (June 21, 2021): 161–86. http://dx.doi.org/10.5604/01.3001.0014.9568.
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Purpose: The purpose of this study is to identify ways to improve or simplify the quality and accuracy of IP valuations via accounting regulation improvements. Methodology/approach: This research relies on qualitative research methods such as case law analysis and comparative research of accounting standards and approaches. Findings: Evidence from this study points towards the conclusion that financial statements currently only reflect a historic financial record of the particular business, profoundly biased by a conservative tangible assets perspective. The central thesis of this study is that it makes sense to adopt a comprehensive intellectual property valuation strategy to ascertain the specific value of the intangible assets since the comprehensive application of valuation models is likely to yield superior results to using them separately. Research limitations/implications: Although the proposed approach seeks to bring more clarity to the valuation process while simplifying the appraisal of intellectual property assets, its efficacy is subject to increased transparency, a maturing intellectual property market, and credible data availability. Originality/value: This study makes a valuable contribution to research on methods that facilitate accurate intellectual property valuation while offering an alternative valuation model which combines the strengths of individual valuation models.
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Ong, Chui Zi, Rasidah Mohd-Rashid, and Kamarun Nisham Taufil-Mohd. "IPO valuation using the price-multiple methods: evidence from Malaysia." Journal of Financial Reporting and Accounting 19, no. 4 (February 1, 2021): 540–70. http://dx.doi.org/10.1108/jfra-05-2020-0128.
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Purpose This study aims to investigate the valuation accuracy of Malaysian initial public offerings (IPOs) by using price-multiple methods. Design/methodology/approach Cross-sectional data including 467 IPOs listed on the Malaysian stock exchange were used for the period of 2000–2017. This study used univariate ordinary least square (OLS) regression to analyse the relationship between IPOs’ price-multiples and comparable firms’ price-multiples. The test of valuation accuracy was conducted via computing valuation errors by segregating the sample into two groups: fixed-price IPOs and book-built IPOs. Furthermore, multiple OLS regression was used to examine the influence of IPO valuation on underpricing. Findings The findings of the results suggested that IPOs price-to-earnings (P/E), price-to-book (P/B) and price-to-sales (P/S) multiples were positively related to the median P/E, P/B and P/S multiples of five comparable firms matched by industry and revenues. The P/S multiple was shown to be the most significant valuation method, specifically in book-built IPOs. The findings indicated that those firms that had a lower valuation in comparison to the comparable firms were inclined to underprice their IPOs to allure investors to subscribe IPOs. In addition, book-built IPOs that had fair valuations were inclined to generate higher initial returns for investors. Practical implications The findings of this study observed implications for underwriters in avoiding the mis-valuation issue by considering the book-building mechanism. Originality/value This study attempted to explore the suitability of the valuation method to value IPOs in Malaysia.
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Florea, Delia Andreea, and Diana Iulia Opriș. "Stock Valuation Methods." CECCAR Business Review 2, no. 1 (January 31, 2021): 32–38. http://dx.doi.org/10.37945/cbr.2021.01.04.
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Gdakowicz, Anna, and Ewa Putek-Szeląg. "The Use of Statistical Methods for Determining Attribute Weights and the Influence of Attributes on Property Value." Real Estate Management and Valuation 28, no. 4 (December 1, 2020): 33–47. http://dx.doi.org/10.1515/remav-2020-0030.
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AbstractDetermining the impact of individual attributes on the value or price of real estate in business practice poses many problems. One of the solutions to this problem is the use of statistical methods. The article proposes correlation coefficients (and their partial modifications) that can be used to determine the impact of selected features on the value of real estate. In addition, several procedures were taken into account for the factors in further calculations, using different methods for determining weights. Empirical verification of the proposed solutions was based on the mass valuation of land properties. The obtained results were compared with valuations developed by property appraisers and valuation errors were calculated. Based on valuation errors, the proposed methods of calculation procedures were ranged, indicating those which provide results closest to the individual valuations carried out by property appraisers.
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Pawlak, Zbigniew, and Andrzej Smoleń. "Valuation Methods of Sports Companies." Physical Culture and Sport. Studies and Research 46, no. 1 (December 1, 2009): 243–53. http://dx.doi.org/10.2478/v10141-009-0021-1.
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Valuation Methods of Sports CompaniesThe valuation of sports companies is indispensable during commercial buy and sell transactions, restructuring processes, determining premiums for the purposes of property insurance.For the valuation of sports companies four approaches are possible i.e. assets-based, income-based, market-based and mixed-valuation approaches. For each approach there are specific company valuation methods. Using real-life examples, this paper discusses the following sports companies' valuation methods: book value, adjusted book value, replacement, liquidation, capitalized profit, discounted cash flow, comparative worth, market multiples and German valuation method. The mixed approach using the German method is applied when the output prices from conventional company valuation methods vary too much, and differences in values exceed 25%.From the management accounting perspective the skilful application of valuation methods to sports companies should be regarded as one of the prerequisites for effective management of sports companies.
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Vishwakarma, Urmika. "Analysis on Effect of COVID -19 on Property Valuation in Real Estate Market." International Journal for Research in Applied Science and Engineering Technology 9, no. 12 (December 31, 2021): 1467–73. http://dx.doi.org/10.22214/ijraset.2021.39558.
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Abstract: The valuation of real estate is a central tenet for all businesses. Land and property are factors of production and, as with any other asset, the value of the land flows from the use to which it is put, and that in turn is dependent upon the demand (and supply) for the product that is produced. Valuation, in its simplest form, is the determination of the amount for which the property will transact on a particular date. However, there is a wide range of purposes for which valuations are required. These range from valuations for purchase and sale, transfer, tax assessment, expropriation, inheritance or estate settlement, investment and financing. The objective of the paper is to provide a brief overview of the methods used in real estate valuation. Valuation methods can be grouped as traditional and advanced. The traditional methods are regression models, etc. MRA has been implemented by many researchers to study valuation of real property cite that MRA is possible for coefficient estimates and factor weightings using a large number of actual sale cases. Keywords: Real property, property valuation, multiple regression analysis, SWOT Analysis
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Jafary, P., D. Shojaei, A. Rajabifard, and T. Ngo. "A FRAMEWORK TO INTEGRATE BIM WITH ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING-BASED PROPERTY VALUATION METHODS." ISPRS Annals of the Photogrammetry, Remote Sensing and Spatial Information Sciences X-4/W2-2022 (October 14, 2022): 129–36. http://dx.doi.org/10.5194/isprs-annals-x-4-w2-2022-129-2022.
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Abstract. Property valuation is of extreme importance since variations in the real estate market enormously influence people’s life. The main goal of Automated Valuation Models (AVMs) is to calculate the market value of a large number of properties with an acceptable accuracy. The Hedonic Price Model (HPM) is the most widely used AVM for the valuation purposes. Despite its simplicity, ease of use and straightforwardness, HPM lacks the capability to address the non-linear relationships between different value-related factors. Hence, researchers have developed other state-of-the-art property valuation methods based on the advancements in computer science including Artificial Intelligence (AI), Machine Learning (ML), computer vision and deep learning. Design, development, and validation of such advanced AVMs require establishment of a database including data on the different influential factors. Two types of factors are used in the literature, including textual and visual features. Reliable data sources are required for the implementation of AVMs since the accuracy of the provided valuations is definitely linked to the reliability of the used real estate databases. Building Information Modelling (BIM) provides precise information on different components of properties. Although some scholars have tried to use BIM for property valuation, BIM benefits in different valuation procedures have not been fully investigated. Hence, this paper provides a framework that consider BIM capabilities to be integrated with different stages and processes in property valuation, especially in relation to advanced AVMs based on AI and ML.
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Fang, Zhirui. "Research and Application of Company Valuation Methods." BCP Business & Management 45 (April 27, 2023): 109–14. http://dx.doi.org/10.54691/bcpbm.v45i.4870.
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The idea of company valuation originated from Irving Fisher's financial budget theory. The MM theory of American scholars F.Modigliani and Merton H.Miller marks the emergence of valuation theory in the modern sense. This paper mainly studies the theory and application of two company valuation methods—relative valuation method and absolute valuation method. It can be concluded from the research that the essence of valuation methods is the discounted valuation of future cash flows. In the case of stable performance, the price-earnings ratio P/E relative valuation method is the most intuitive. At various stages of development, the same company uses various valuation methodologies. The valuation approach should be modified in accordance with the company's current position. In addition, there is some subjectivity involved in valuing something because there is no universally accepted method. The significance of this research lies in valuation methods have their own advantages and limitations, and they have different emphases. Multiple valuation methods can be used for a comprehensive comparison.
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Augustyniak, Hanna, Jacek Laszek, Krzysztof Olszewski, and Joanna Waszczuk. "Property valuation for mortgage purposes in Poland." Property Management 36, no. 2 (April 16, 2018): 234–47. http://dx.doi.org/10.1108/pm-09-2016-0049.
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Purpose The purpose of this paper is to describe the property valuation methods that are applied in Poland. It shows that they base on international standards and are a reliable source of information for international investors and banks. Design/methodology/approach The valuation methods are described and critically assessed, potential problems are pointed out. The analysis of lending risk is analysed on data about non-performing loans (NPL). Findings Polish valuation methods are in line with international methods, but there are some risks, like small number of transactions, subjective behaviour of valuers. The low NPL ratios indicate that the valuation works correctly. Practical implications The Polish valuation methods are trustworthy, non-performing mortgage ratios are low, however, banks and investors should ask whether there is a local zoning plan. Moreover, they should look critically at the comparables that were used during the valuation process, if in their opinion the valuation is overly low or high. Originality/value This paper focusses on valuation from a financial stability perspective. It uses Polish literature and data on NPLs to give an insight on valuation of property and mortgage risk in Poland. Besides the review of the methods it points out the problems related to valuation uncertainty, such as the risk of subjective behaviour of valuers and the low number of transactions in some regions, which are used for valuations.
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Brown, Stephen. "Valuing the Valuation Methods." CFA Institute Magazine 15, no. 6 (November 2004): 46–47. http://dx.doi.org/10.2469/cfm.v15.n6.2900.
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Martin, Thomas A. "Traditional Equity Valuation Methods." AIMR Conference Proceedings 1998, no. 2 (May 1998): 21–35. http://dx.doi.org/10.2469/cp.v1998.n2.5.
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Zhao, Jinsha. "American Option Valuation Methods." International Journal of Economics and Finance 10, no. 5 (March 29, 2018): 1. http://dx.doi.org/10.5539/ijef.v10n5p1.
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This paper implements and compares eight American option valuation methods: binomial, trinomial, explicit finite difference, implicit finite difference and quadratic approximation methods. And three Monte Carlo methods: bundling technique of Tilley (1993), simulated tree (ST) of Broadie, Glasserman, and Jain (1997), and least square regression method (LSM) of Longstaff and Schwartz (2001). Methods are compared in terms of computation efficiency and price accuracy. The findings suggest that binomial is the best performing numerical method in terms of accuracy and efficiency. LSM beats the other two simulation methods in terms of efficiency, accuracy and number of discrete exercise opportunities.
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WOOD, ERNEST. "POSITIVE VALUATION METHODS: 1." Journal of Valuation 4, no. 1 (January 1986): 7–15. http://dx.doi.org/10.1108/eb007983.
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WOOD, ERNEST. "POSITIVE VALUATION METHODS: 2." Journal of Valuation 4, no. 2 (February 1986): 170–84. http://dx.doi.org/10.1108/eb007992.
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Sedláček, J. "The methods of valuation in agricultural accounting." Agricultural Economics (Zemědělská ekonomika) 56, No. 2 (February 25, 2010): 59–66. http://dx.doi.org/10.17221/1487-agricecon.
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This paper deals with the valuation of the biological assets and agricultural production. There are analyzed two approaches: Czech and international. The International Accounting Standards are emulative of more authentic presentment of economic processes in agricultural activities than Czech accounting legislation. From the comparison the both approaches accrued some differences, which can influent the financial statements of enterprises. The causation of main difference appears an application of fair value, which is prescribed for biological assets and agricultural production in international accounting standards. In international accounting standards is preferred principle of fair and true view, while in Czech accounting is preferred prudence principle.
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VAN SCHIE, NIENKE, MIKE DUIJN, and JURIAN EDELENBOS. "CO-VALUATION: EXPLORING METHODS FOR EXPERT AND STAKEHOLDER VALUATION." Journal of Environmental Assessment Policy and Management 13, no. 04 (December 2011): 619–50. http://dx.doi.org/10.1142/s1464333211004036.
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Many scholars describe a trend towards stakeholder involvement. Also in Dutch water management, this is expected to generate more support and better-informed information for decision-making. An approach or methodology for the combined involvement of stakeholder and expert inputs in decision-making, however, is lacking (Rinaudo and Garin, 2005; Petts and Brooks, 2006; Leach, 2006; Sabatier et al., 2005; Scholz and Stiftel, 2005). In this article we focus on methodological aspects of an integral stakeholder approach in relation to its expected contribution to decision-making. We describe and analyse an approach of co-valuation for spatial issues, including multiple actors involved. Experiences with this approach in a case study on Dutch spatial water management reconfirm that existing assessment methodology does not provide for the involvement of stakeholder inputs and focuses on expert-based information. An interactive approach of (existing) (e)valuation (methods) may involve these various knowledge bases in assessment.
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Razali, Muhammad Najib, Rohaya Abdul Jalil, Kamalahasan Achu, and Hishamuddin Mohd Ali. "Identification of Risk Factors in Business Valuation." Journal of Risk and Financial Management 15, no. 7 (June 27, 2022): 282. http://dx.doi.org/10.3390/jrfm15070282.
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It is widely accepted that risk and uncertainty are integral parts of the property valuation process. Uncertainty in property valuation is derived from the characteristics of property itself. The issue pertaining to risk and uncertainty in property valuations is currently one of the key concerns in global valuation practice to date in addressing the decision of risk and uncertainty in valuation, especially for business purposes or in the current term known as business valuation. The judgment and experience still depend on the expertise of the individual valuers alone. The valuation methods used can cause problems if certain elements in business such as risk are highlighted, especially to determine market value. There is a need for valuers to express assumptions which take into account risk and uncertainties, and then pass on the results of the estimation process to the end user of the valuation report. This research employed Analytical Hierarchical Process (AHP) to identify the level of risk in business valuation for valuers to identify which risk areas will expose them to professional liabilities, which then leads to mitigation of risk to determine value in business valuations. AHP will also be able to identify the level of risk in each of the approaches in business valuation which could help valuers to determine the value and market value in the valuation process. This paper will propose some practical approaches of how to address the risk and uncertainty of the valuation process, especially for the purpose of business valuation.
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Ramanauskaitė, Agnė, and Kristina Rudžionienė. "INTELLECTUAL CAPITAL VALUATION: METHODS AND THEIR CLASSIFICATION." Ekonomika 92, no. 2 (January 1, 2013): 79–92. http://dx.doi.org/10.15388/ekon.2013.0.1413.
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Abstract. Currently, a more significant added value is created by intellectual rather than physical capital; yet, according to the current standards of accounting, only a minor segment of intellectual capital is presented in financial accounts of enterprises as it usually does not satisfy one of the criteria of property recognition in financial accounting, namely reliable valuation. As a result, there is an increasing demand for novel methods of valuation, enabling enterprises to establish reliably the value of intellectual capital or its specific segments of a given enterprise. A number of scholars have dealt with the methods of intellectual capital valuation. However, their works analyze and classify different methods of intellectual capital valuation, and different criteria of classification are employed; hence, there is no universally accepted opinion on the issue. That is why the aim of this research was to generalize a scheme of methods of intellectual capital valuation. The main methods applied in the present study are the synthesis and generalization of academic writings, including content analysis. The results of the research and its conclusions are based on the analysis of academic investigations conducted by various authors and the resulting publications. Results. The article generalizes the methods of intellectual capital valuation, suggested by a number of scholars, provides comparisons, reveals the multiplicity of the methods, and highlights the unlimited research of the academic field. Besides, the main classifications of methods of intellectual capital valuation are provided, and the applied criteria are defined. Conclusions. It was established that more than sixty different methods for the valuation of the intellectual capital of an enterprise are available. The results of the research show that these methods are classified according to the four following features. Correspondingly, a classification scheme of intellectual capital valuation methods has been developed. It has been established that most methods of intellectual capital valuation are based on scorecard, they assess specific components; of intellectual capital and in the process of valuation do not employ monetary units of measurement. Tis reveals a lack of the studies that focus on the financial aspect of intellectual capital valuation methods.Key words: intellectual capital, valuation, valuation methods, classification of methods
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BARROW, Colin, Gilles COPIN, Julian LANGE, Benoît LELEUX, Louise ST-CYR, Alan RICHARDSON, and Rémy PALIARD. "Valuing High Growth Potential Companies: An International Comparison of Practices by Leading Venture Capitalists and Underwriters." Management international 6, no. 1 (2001): 55–73. http://dx.doi.org/10.59876/a-h14d-7qkt.
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This paper offers the first international comparison (France, Great Britain, United States, and Canada) of the processes used by venture capitalists and underwriters in the valuations of high growth potential companies, focussing in particular on the valuation processes and techniques used and the development and dissemination of valuation-specific knowledge. Differences between two groups and their key determinants are highlighted and tested using a sample of 174 valuation cases across 42 venture capital and 40 underwriting firms. The results support a large reliance on relatively simple valuation methods supported by extensive due diligences, reinforcing the important of negotiations and deal-making in the ultimate valuation results.
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Kucharska-Stasiak, Ewa. "Reproduction of Real Estate Valuation Methodology in Practice. An Attempt at Identifying Sources of Divergences." Real Estate Management and Valuation 22, no. 2 (July 8, 2014): 67–79. http://dx.doi.org/10.2478/remav-2014-0018.
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Abstract The objective of the study is to try and identify the reasons for the detachment of the valuation practice from its methodology. Two methods have been used in the paper: the analysis method and the case study method, under which fourteen property valuation reports posted on websites and two opinions about the property valuation prepared for court purposes in order to detect and identify sources of deviations from the valuation methodology have been analyzed. The study, besides theoretical aspects, includes references to practical application: pointing out directions of changes in legal regulations and national valuation principles, which should help achieve uniformity in interpreting the valuation concept, allowing the reduction of its uncertainty, understood as the uncertainty of a single valuation and uncertainty as the difference between valuations.
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Uwaifiokun, Vincent. "Application of Contemporary Equated Yield and Dcf Explicit Growth Methods in the Valuation of Over-Rented Properties in a Recessionary Period: A Case Study of Nigeria." Real Estate Management and Valuation 26, no. 3 (September 1, 2018): 35–50. http://dx.doi.org/10.2478/remav-2018-0023.
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Abstract Valuations have always been time specific and, if properly undertaken, are supposed to give a true reflection of property market conditions at any given point in time. In periods of economic decline, when properties are leased or tend to exchange hands at rents or prices lower than their true market value, a need to capture the explicit growth rate associated with an instability in the property market arises. With the Nigerian economy currently facing its worst recession in years, the onus is on valuers to adopt contemporary methods of valuation which seek to mirror the true situation of the property market at any point in time; something which, hitherto, conventional methods of valuations have failed to do. This paper therefore takes a pilot survey of the types of investment valuation models currently adopted by valuers when carrying out valuations of reversionary properties in a recession. The study seeks to highlight the knowledge gap of valuers, both in practice and in the academia, concerning the use of the Equated yield and DCF explicit growth method of valuation, and hence enlighten them and the general public on its use as a more appropriate method of valuing properties during a downturn.
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Ausloos, Marcel. "Valuation Models Applied to Value-Based Management—Application to the Case of UK Companies with Problems." Forecasting 2, no. 4 (December 11, 2020): 549–65. http://dx.doi.org/10.3390/forecast2040029.
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Many still rightly wonder whether accounting numbers affect business value. Basic questions are “why?” and “how?” We aim at promoting an objective choice on how optimizing the most suitable valuation methods under a “value-based management” framework through some performance measurement systems. First, we present a comprehensive review of valuation methods. Three valuations methods, (i) Free Cash Flow Valuation Model (FCFVM), (ii) Residual Earning Valuation Model (REVM) and (iii) Abnormal Earning Growth Model (AEGM), are presented. We point out advantages and limitations. As applications, the proofs of our findings are illustrated on three study cases: Marks & Spencer’s (M&S’s) business pattern (size and growth prospect), which had a recently advertised valuation “problem”, and two comparable companies, Tesco and Sainsbury’s, all three chosen for multiple-based valuation. For the purpose, two value drivers are chosen, EnV/EBIT (entity value/earnings before interests and taxes) and the corresponding EnV/Sales. Thus, the question whether accounting numbers through models based on mathematical economics truly affect business value has an answer: “Maybe, yes”.
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Malienė, Vida, Edmundas K. Zavadskas, Artūras Kaklauskas, and Saulius Raslanas. "PROPERTY VALUATION BY MULTIPLE CRITERIA METHODS/NEKILNOJAMOJO TURTO VERTINIMAS DAUGIAKRITERINIU METODU." JOURNAL OF CIVIL ENGINEERING AND MANAGEMENT 5, no. 4 (August 31, 1999): 272–84. http://dx.doi.org/10.3846/13921525.1999.10531475.
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Multiple criteria valuation methods are widely used in real estate valuation all over the world. In USA, UK and other countries these methods are part of techniques based on comparative and reinstatement values as well as on income of use. They are used in valuating various property characteristics, ie its location or obsolescence degree. In Germany, however, multiple criteria valuation technique refers to a separate group of property valuation methods applied when market data are unavailable or insufficient (ie purchasing, selling or renting prices are not known). The above methods have been used for real estate valuation since 1976. Dr. H. E. Auerhammer [1] was the first to apply these approaches to solving real estate valuation problem caused by the scarcity of market data. These methods supplemented with systems of criteria developed by other authors were later applied to particular cases when three major commonly used property valuation methods could not be applied. Thus, K. Gablenz [2] suggests using the method described in assessing plots intended for agriculture, while B. Bischoff [3] offers to use it for determining the investments into plots. R. Vogel [4] thinks that the approach may be used for determining the approximate value of land, whereas G. Sommer and P. Zimmermann [5] and Piehler [6] developed a system of criteria to be used as a part of the method described in determining the differences between the value of quantitative and qualitative characteristics of an object and its market value. T. Gierardy and R. Moeckel [7] described the advantages and disadvantages of methods based on multiple criteria analysis. The above methods are widely used in Germany for property valuation, the peak of their application being associated with the unification of East and West Germany in 1990 [8]. Multiple criteria analysis presented in this paper for property valuation may be used to the advantage of various interested parties (see Fig 1). The representatives of various parties including appraisers, buyers, sellers and investors may use it for their particular purposes: appraiser may apply this method to real estate value analysis for determining the market, use and other values of real estate being mortgaged, ensured, privatised, divided or nationalised; investor may rely on it for more efficient use of this property; buyer may use it for choosing property which would satisfy his personal needs to the best advantage; seller has to determine the market price of his property that would ensure its competitive ability on the market. To satisfy all the needs described multiple criteria valuation method presented in the paper may be successfully used. To show its efficiency the solution of a sample problem, representing a real case is provided.
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DEACONU, Adela, Ioana CIURDAS, and Carmen Giorgiana BONACI. "Fair Value Complexity and the Audit Risk." Audit Financiar 19, no. 161 (March 2, 2021): 191–200. http://dx.doi.org/10.20869/auditf/2021/161/007.
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This paper checks if the auditors in an emergent context, where the fair value (FV) concept, its implementation and audit are relatively new, are aware of the estimation risk induced by the valuation process (the FV provider and FV disclosure), depending on the quality of internal control (IC). An experiment was applied to a group of auditors and master students, using two elements pertaining to FV reporting: “Valuation attributes and sensitivity of data”, respectively “Methods, assumptions and model”. This experiment revealed that: (1) FV audit risk is lower when the estimation is made by an external, instead of an internal valuator; (2) the master’s students, compared to more experienced professional auditors, manifest an overconfidence in the external Valuation Report in terms of valuation attributes, data availability and solutions adopted to test the sensitivity of value; (3) the audit risk is lower when the valuator is external and hence the auditors verify in detail the information provided in the Valuation Report as inputs and methods applied; (4) when IC is strong as quality, the verification of methods, assumptions and model induces for auditors a higher risk than the other FV disclosed component, valuation attributes and sensitivity of data, in the case of management estimation.
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Allee, Kristian D., Devon Erickson, Adam M. Esplin, and Teri Lombardi Yohn. "The Characteristics, Valuation Methods, and Information Use of Valuation Specialists." Accounting Horizons 34, no. 3 (April 1, 2020): 23–38. http://dx.doi.org/10.2308/horizons-19-057.
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SYNOPSIS We provide insights into the inputs and valuation models used by valuation specialists. We survey 172 valuation specialists and conduct several follow-up interviews covering various topics, including the valuation inputs, models, and industry information that they use, as well as how they estimate long-term growth and the cost of capital. We find that valuation specialists rely on their professional judgment to select a valuation model but prefer the discounted cash flow (DCF) model. They primarily rely on the firm's historical performance when forecasting the financial statements, but communication with management is particularly relevant for forecasting future earnings or cash flows. When estimating the cost of capital, they most commonly use the risk-free rate with subjective adjustments. The results of our study provide insights on the information use of valuation specialists that are relevant to other valuation specialists, managers, academic researchers, and regulators. JEL classification: M41; G12; G17; G32.
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Akujuru, Victor A., and Les Ruddock. "Dichotomising compulsory land acquisition and land contamination valuations." International Journal of Disaster Resilience in the Built Environment 6, no. 3 (September 14, 2015): 268–88. http://dx.doi.org/10.1108/ijdrbe-11-2013-0040.
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Purpose – This study aims at identifying the consequences of adopting statutory rather than market basis in assessing damages due to contamination to land. Most valuations undertaken to assess compensation for damages due to contamination on land are done with valuation methods prescribed by law for the compulsory acquisition of land. Design/methodology/approach – A total of 80 registered valuation firms with experience in both compulsory acquisition and damage assessment participated in a questionnaire survey to ascertain the methods adopted in valuing when determining the compensation payable as damages due to land contamination and the need for a framework for such valuations, in addition to some archival documents relating to the relevant laws and some purposively selected valuation reports, which were reviewed. Findings – The results of the analysis indicate that the use of compulsory acquisition valuation methods results in inadequate damages, which engenders conflicts among the stakeholders. The absence of any framework for damage assessment is responsible for the current practice in the Niger Delta, and it is recommended that international best practices utilising market basis of valuation be adopted. Research limitations/implications – Most valuation methods available are useful for valuing commercial properties regularly traded in the market and not applicable to the Niger Delta, which is mostly rural with very few market transactions. It is expected that this study will enable oil and gas industry operators, professional valuers advising the land owners or operators in the industry and the government to differentiate compensation paid for compulsory acquisition and compensation required to placate those suffering losses due to contamination. Practical implications – The findings will assist professional valuers to be more professional in valuing contaminated land devastated by oil spills. Social implications – Adopting the findings will engender a greater acceptability of the results of valuations undertaken in the wake of an oil spillage disaster and ensure a peaceful environment for the oil operators and the entire populace. Originality/value – The findings of this study are expected to assist policymakers in emerging economies and professional valuers acting in these environments to avoid precipitating crises by adopting inappropriate valuation techniques when assessing damages due to contamination. This study is original and has not been published elsewhere.
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Gawron, Krzysztof, Alina Yakymchuk, and Olena Tyvonchuk. "The bankrupt entity’s assets valuation methods: Polish approach." Investment Management and Financial Innovations 16, no. 3 (October 7, 2019): 319–31. http://dx.doi.org/10.21511/imfi.16(3).2019.28.
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The assets of a business entity that is subject to bankruptcy proceedings form bankruptcy estate. The correct assessment of its value is a necessary pre-condition to save time and cost effective bankruptcy proceedings. The article presents the valuation methods applied in Poland for assets consisting of real estate and movables that collectively constitute the bankruptcy estate. The main objective of this study is to assess the reliability and efficiency of the appraisals of book, market and forced sale value in relation to the possibility of correct estimation of funds obtained from the sale of individual assets in the course of liquidation proceedings. The article presents the results of a study conducted in 15 intentionally selected enterprises in bankruptcy operating on the territory of Lubelskie Voivodeship in Poland. It offers the analysis of applied valuation methods and the description of specific conditions of sale of bankrupt entity’s assets in accordance with legal regulations and applied practices. In particular, it compares the differences in the value of the examined assets determined by different methods and identifies the reasons for these differences. The most important conclusion of the study is the fact that neither the market value nor the book value allow for reliable estimation of the revenues that could be obtained from the sale of the bankruptcy estate, which makes it impossible to determine the probable level of satisfaction of creditors’ claims. The specific nature of sale under bankruptcy justifies the use of the forced sale value despite difficulties connected with its estimation. The basic recommendation is the necessity to supplement the valuation report with the estimation of the forced sale value along with the comprehensive description of the algorithm of its calculation.
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Małkowska, Agnieszka, and Małgorzata Uhruska. "Towards Specialization or Extension? Searching for Valuation Services Models Using Cluster Analysis." Real Estate Management and Valuation 27, no. 4 (December 1, 2019): 27–38. http://dx.doi.org/10.2478/remav-2019-0033.
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Abstract The paper delivers original data on specialization in property valuation services in Poland. Its aim is to identify relatively homogeneous groups of property appraisers taking into consideration the scope of services performed by them and the types of clients served. Based on the survey results, it was possible to indicate major models in property valuation services consistent with market applications, which allows us to verify the thesis on specialization in doing business in property valuation. The research strategy approach is twofold. Firstly, we have used the agglomerative cluster method to divide the types of valuation services and appraisers’ clients in order to find groups of similar valuation services and represent the main models of business in property appraisals. Secondly, we have applied the k-means partition methods to find relatively homogenous groups of respondents, taking into account the frequency of carrying out the particular types of valuations and clients served. As a result of our research, we present four clusters combining valuations and client types which reflect the models of property valuers’ professional activity, i.e: the market-oriented housing valuation model, market-oriented commercial valuation model, non-market-oriented judicial valuation model and non-market- oriented public valuation model. Research findings confirm the existence of three out of the four specialization clusters within the professional activity. We also extracted a group of appraisers operating on a broad scale, both when it comes to the types of services offered and clients served.
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Bekkerman, Anton, Gary W. Brester, and Tyrel J. McDonald. "A Semiparametric Approach to Analyzing Differentiated Agricultural Products." Journal of Agricultural and Applied Economics 45, no. 1 (February 2013): 79–94. http://dx.doi.org/10.1017/s1074070800004594.
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When consumers have heterogeneous perceptions about product quality, traditional parametric methods may not provide accurate marginal valuation estimates of a product's characteristics. A quantile regression framework can be used to estimate valuations of product characteristics when quality perceptions are not homogeneous. Semiparametric quantile regressions provide identification and quantification of heterogeneous marginal valuation effects across a conditional price distribution. Using purchase price data from a bull auction, we show that there are nonconstant marginal valuations of bull carcass and growth traits. Improved understanding of product characteristic valuations across differentiated market segments can help producers develop more cost-effective management strategies.
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Dmytrów, Krzysztof. "Calibration of attributes influence in the process of real estate mass appraisal by using decision-making methods." Przegląd Statystyczny 66, no. 4 (April 30, 2020): 287–308. http://dx.doi.org/10.5604/01.3001.0014.0953.
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There are situations in the real estate market in which a large number of properties have to be valued at the same time. In such cases it is advisable to use mass valuation methods. These methods involve estimating the value of a property on the basis of the values of the attributes defining it. The aim of the paper is to calibrate the influence of attributes on unit values of properties in mass appraisal in order to minimise the valuation error. The research was conducted for 318 residential properties located in Szczecin. The Szczecin Algorithm of Real Estate Mass Appraisal was used along with the econometric, statistical and expert approaches. The econometric approach is based on the ridge regression model, the statistical approach on the partial Kendall T correlation coefficients, and the expert approach on the AHP method. The quadratic programming was co-employed with the statistical and expert approaches in order to minimise the mean square error (MSE) of the valuations. The econometric and statistical approaches with the minimisation of the MSE generated best results. The least accurate results were obtained by means of the statistical and expert approaches without the minimisation of the MSE. However, even though the optimisation of the MSE improves the quality of valuations, it also narrows down their volatility, which might make the valuation of properties from the outside of a given database more problematic.
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Xiong, Xiao. "Investment Value of an Internet Company in China: A Case Study of Tencent Holdings Company." Asian Trade Association 9, no. 2 (December 30, 2022): 37–48. http://dx.doi.org/10.22447/jatb.9.2.202212.37.
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Purpose - Traditional industries can usually be estimated and analyzed from multiple angles, such as the balance sheet. However, the proportion of other intangible assets in valuations is high and cannot be reflected in the balance sheet in Internet companies. Therefore, through various valuation methods to study and evaluate the investment value of the stock of Internet industry listed companies, finding heavily investing listed companies in the Internet industry has important practical significance.
Design/Methodology/Approach - Starting from the theory of value investment, combined with financial analysis methods and valuation analysis methods, the study analyzes the company’s business, finances, and valuation to achieve the purpose of correcting the company’s stock investment.
Findings - The value of Tencent, which we calculated through the PE valuation method and the branch valuation method, is close to the average stock price of Tencent in the past years, indicating that in the long run, the market is relatively rational. The value of the current stock price is lower than our valuation, explaining that the current market price is at a relatively underestimated level, and it has certain investment value.
Research Implications - This study adopts the PE and the branch valuation methods, making the stock value research method more objective, more scientific, and rigorous to help investors maximize information effectiveness, and make rational judgments to find investment opportunities or investment risks earlier.
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Senechal, T. J. "Valuation for Arbitration: Compensation Standards, Valuation Methods and Expert Evidence." Journal of World Energy Law & Business 1, no. 3 (October 24, 2008): 250–52. http://dx.doi.org/10.1093/jwelb/jwn015.
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Graaskamp, James A. "Investment Valuation and Forecasting Methods." Journal of Property Valuation and Investment 10, no. 3 (March 1992): 597–602. http://dx.doi.org/10.1108/14635789210031235.
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Cho, Woo-Young, Doo-Hyun Bae, and Hong-Sok Kim. "Economic Valuation Methods of Biodiversity." Environmental Engineering Research 13, no. 1 (March 28, 2008): 41–48. http://dx.doi.org/10.4491/eer.2008.13.1.041.
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Lichtman, A. I. "Valuation Methods in Division Rings." Journal of Algebra 177, no. 3 (November 1995): 870–98. http://dx.doi.org/10.1006/jabr.1995.1332.
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Hospodarenko, G. M., I. Y. Rassadina, and O. Y. Stasinevych. "Features of soil valuation methods." Collected Works of Uman National University of Horticulture 1, no. 102 (2023): 240–47. http://dx.doi.org/10.32782/2415-8240-2023-102-1-240-247.
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Tizniti, Douaa, and Mohammed Rachid Aasri. "Do Discounts Enhance or Degrade IPOs Valuation Performance?" Financial Markets, Institutions and Risks 5, no. 2 (2021): 34–41. http://dx.doi.org/10.21272/fmir.5(2).34-41.2021.
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In the present study, we investigate the impact of discounts on the valuation performance of initial public offerings. Review of existing literature reveals that such valuation performance lacks examination in terms of discounts as most studies focus on valuation methods. Accordingly, we examine the valuation performance of initial public offerings before and after applying discounts. Whereby, underwriters apply a deliberate discount to fair value estimate before setting the final offer price. We assess the valuation performance of initial public offerings through bias and accuracy errors as well as explainability. When valuation errors are low, the valuation performance is deemed superior. Our sample consists of 39 initial public offerings conducted on the Moroccan stock exchange between 2004 and 2018. We use publicly available prospectus to collect necessary data. Our results reveal that discounts applied to fair value estimate when setting the final offer price reduce valuation errors. Consequently, discounts enhance the valuation performance of initial public offerings. In fact, both optimistic and pessimistic final offer price are closer to market price in comparison with optimistic and pessimistic fair value estimate. We conclude that if valuations conducted by underwriters are objective, discounts serve as a qualitative valuation to supplement the quantitative one. This qualitative valuation incorporates relevant information about market circumstances with regard to initial public offerings. This indicates the superior fundamental analysis underwriters are capable of performing. However, if valuations conducted by underwriters are subjective, then underwriters deliberately overestimates fair value estimate to justify applying discounts when setting the final offer price. Nonetheless, our study reveals that discounts are more than proportional to valuation optimism. Consequently, while discounts absorb this valuation optimism, they also set a valuation pessimism. In other words, discounts avoid overpricing initial public offerings, yet they result in underpricing them. Interestingly, we discover that although optimistic fair value estimate and pessimistic final offer price have approximate valuation errors, underwriters are more comfortable underpricing initial public offerings than overpricing them.
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Brotons, José M., and Manuel E. Sansalvador. "Fuzzy Systems in Business Valuation." International Journal of Uncertainty, Fuzziness and Knowledge-Based Systems 26, Suppl. 1 (December 2018): 1–19. http://dx.doi.org/10.1142/s0218488518400019.
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This research aims to develop a model that is able to integrate and objectify information provided by the different business valuation methods, incorporating quality management in its formal approach, which to date has not been considered in the literature about business valuation or quality management. Firstly, the company is valued using the methods which best adapt to its specific characteristics. Because of the subjectivity inherent in any valuation process, the results will be expressed through Triangular Fuzzy Numbers (TFN). These Fuzzy Numbers will be aggregated and summarized by applying Basic Defuzzification Distribution Uncertain Probabilistic Ordered Weighted Averaging operator (BADD-UPOWA). The weighting factors will be: the degree of confidence in each of the business valuation methods applied, and the innovative use of the company’s position on Crosby’s Quality Administration Grid. The results from application of the model in a case study show a significant reduction in uncertainty in contrast to the initial valuations. Moreover, the proposed methodology is seen to increase the final value of the company as its advances in quality management.
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Li, Jiale. "Research on Theory and Methods of Corporate Valuation." Advances in Economics, Management and Political Sciences 34, no. 1 (November 10, 2023): 106–14. http://dx.doi.org/10.54254/2754-1169/34/20231684.
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Corporate evaluation has been a long-history research field, mostly in finance. There are traditional methods such as DCF, CAPM and APT, which were the most popular valuation method being used in 20th century. Nevertheless, more neoclassical theories have been brought up recently, from the perspectives of investment, pricing or other qualitative areas. Besides, the specific times in post-pandemic environment provide valuable research samples of how company keep survived during the period of declination in economic. Based on the previous traditional research as well as neoclassical and recent studies on business new valuation model, this article gives a more comprehensive overview and appraisal about corporate valuation theories, ranging from absolute to relative valuation models, and finally to recent neoclassical models such as EVA valuation, along with other elements that need to concern when processing corporate valuation, which might contribute to the practical use of corporation acquisition and other investors decisions in both capital and money market.
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Miciuła, Ireneusz, Marta Kadłubek, and Paweł Stępień. "Modern Methods of Business Valuation—Case Study and New Concepts." Sustainability 12, no. 7 (March 30, 2020): 2699. http://dx.doi.org/10.3390/su12072699.
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In the modern world, the terms enterprise value and valuation are of great importance. Knowledge about how much an enterprise is worth is of fundamental importance for both the owner of that company and investors when negotiating the price of an enterprise at the time of conducting a commercial transaction. The article presents the goals of the company’s valuation and characteristic stages of the company’s life at which such valuation is necessary. The article classifies the methods of enterprise valuation used today. On this basis, the valuation methodology is presented according to the MDI-R concept (Assets, Income, Intellectual Capital-Market), which in a broad spectrum measures the effectiveness of the company’s operations and, in accordance with the current features of good valuation, aims to determine the fair value of the company. The purpose of the article is to demonstrate the need to improve the code of conduct and valuation standards. As part of the implementation of the objective, multi-faceted and complex valuation issues are presented, as well as factors that may distort the determination of fair value. The methodology of the study is based on inferences about the methodology of business valuation, and verification is based on practical examples, by which a hypothesis on the existence of critical elements of valuation is verified that allows the use of broad subjectivity in estimating the value of assets. At the same time, the factors that determine the possibility of the existence of too wide a subjectivity in estimating assets, which is in contradiction with the features of good valuation, are presented. The attempt is made to draw attention to the threats arising from modern business valuation methodologies and their challenges in the future. Additionally, this article offers the authors’ proposed hybrid method MDI-R, which draws from existing solutions to improve their functionality and applicability.
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Priilaid, D., and P. Van Rensburg. "The hedonic valuation of South African wine brands." South African Journal of Business Management 43, no. 1 (March 30, 2012): 11–31. http://dx.doi.org/10.4102/sajbm.v43i1.173.
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Working with a set of 35 South African wine brands identified in Priilaid and Van Rensburg (2010a), this study presents two brand valuation techniques that combine non-ordinal wine valuation models with conventional methods of valuation. The first price-premium approach defines brand equity value as the difference between a wine’s price and a valuation of its intrinsic worth. The second quality premium approach defines brand equity value as the difference between a wine’s intrinsic value and, instead of price, the value of its perceived quality when sampled sighted. With a set of assumptions regarding consistency in future wine quality, hectorage, price premiums, and sales volumes, brand valuations for each method are calculated as the net present value of the brand premiums paid per unit over the total cases sold. The consequent computations reveal how the price-premium method realises a mean valuation three times greater than the average derived from the alternate quality premium method. This difference is attributed to extreme valuations noted at either end of the price-premium sample, and suggests that this method is perhaps less conservative than perceived quality premium-based valuations. Additionally, the specification of perpetuity is observed to be too extreme. Alternate time scenarios are considered, with a period of ten years posited as perhaps more appropriate to such computations.
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Aleksandre Vatcharadze, Aleksandre Vatcharadze. "Quantitative Valuation Methods in Green Energy." Economics 105, no. 11-12 (January 25, 2024): 85–92. http://dx.doi.org/10.36962/ecs105/11-12/2023-85.
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Green Energy is a special case because it can be considered both as a “private good” and a “public good.” In other words, green energy carries a positive externality and the market value reflects only a small portion of the total benefits. That is why, the methods of assessing the value of a market economy does not give a complete picture. In order to calculate the total monetary value in green energy, the indirect valuation methods cannot give the true value, since they study only the use value, and environmental goods/services carries usually the non-use value too. Therefore, direct market valuation methods such as Contingent Valuation (CVM) and Choice Experiment (CE) methods can be used to calculate the total value in Green Energy. Keywords: Green Energy; Willingness to Accept (WTA); Willingness to Pay (WTP); Contingent Valuation Method (CVM); Choice Experiment (CE).
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Harper, Charles P., and Lawrence C. Rose. "Accuracy of Appraisers and Appraisal Methods of Closely Held Companies." Entrepreneurship Theory and Practice 17, no. 3 (April 1993): 21–33. http://dx.doi.org/10.1177/104225879301700302.
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Valuation experts often use different methodologies when estimating the value of a closely held company. This paper analyzes the general valuation methodologies and the specific factors used by appraisers. The data set consists of actual appraisals, financial data, and the sale prices for 258 companies. Results Indicate that valuation estimates are sensitive to both the methodology used and the background of the appraiser making the valuation.
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Ivanovski, Zoran, Zoran Narasanov, and Nadica Ivanovska. "Performance Evaluation of Stocks’ Valuation Models at MSE." Economic and Regional Studies / Studia Ekonomiczne i Regionalne 11, no. 2 (June 1, 2018): 7–23. http://dx.doi.org/10.2478/ers-2018-0011.
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Abstract Subject and purpose of work: The main task of this paper is to examine the proximity of valuations generated by different valuation models to stock prices in order to investigate their reliability at Macedonian Stock Exchange (MSE) and to present alternative “scenario” methodology for discounted free cash flow to firm valuation. Materials and methods: By using publicly available data from MSE we are calculating stock prices with three stock valuation models: Discounted Free Cash Flow, Dividend Discount and Relative Valuation. Results: The evaluation of performance of three stock valuation models at the MSE identified that model of Price Multiplies (P/E and other profitability ratios) offer reliable stock values determination and lower level of price errors compared with the average stocks market prices. Conclusions: The Discounted Free Cash Flow (DCF) model provides values close to average market prices, while Dividend Discount (DDM) valuation model generally mispriced stocks at MSE. We suggest the use of DCF model combined with relative valuation models for accurate stocks’ values calculation at MSE.
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Epifanov, E. S., and N. Z. Atarov. "Methods of valuation for an Internet business." Voprosy regionalnoj ekonomiki 30, no. 1 (March 20, 2017): 83–89. http://dx.doi.org/10.21499/2078-4023-2017-30-1-83-89.
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This article presents a description of the main methods of valuation Internet business: a comparative approach, the income approach, the cost approach; and provides guidance on the valuation of Internet projects.
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Ferraro, Olga. "A Brief Overview of the IPO Valuation Methods." International Journal of Business and Management 15, no. 12 (November 6, 2020): 41. http://dx.doi.org/10.5539/ijbm.v15n12p41.
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The method adopted for pricing in an Initial Public Offering is a key issue in the studies on business valuation. In particular, various researches sought to verify which valuation methodologies are preferable in the context of an initial public offering.
The review of the main literature shows that Discounted Cash Flow, Market Multiples, Dividend Discount Model and, even if just to some degree, Economic Value Added are the most popular methodologies in the valuation practice.
The comparison among different valuation methods, proposed in the literature and variously applied in national and international practices, reveals the necessity to pay more attention to valuation mechanisms that drive the pricing of the shares to be listed.
The topic is linked to the ever more pertinent debate on the use of different methods in professional practice: financial experts and analysts tend, in fact, to compare results according to different estimates.