Relative Performance of Valuation Using Multiples. Empirical Evidence on Bucharest Stock Exchange
AbstractThis 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.
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Bibliographic InfoArticle provided by Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante in its journal The Review of Finance and Banking.
Volume (Year): 01 (2009)
Issue (Month): 1 (December)
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Postal: Strada Mihai Eminescu nr.13-15, sector 1, Bucuresti, Romania
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Selection method; capital markets;
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