Relative Performance of Valuation Using Multiples. Empirical Evidence on Bucharest Stock Exchange
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.
Volume (Year): 01 (2009)
Issue (Month): 1 (December)
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