Equity Valuation Using Multiples: An Empirical Investigation

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XIIContents4.5 Actual valuation......................................................................................764.5.1 Ratio analysis .............................................................................764.5.2 Adjustment factor.......................................................................784.6 Two-factor multiples valuation model....................................................804.6.1 Decision relevant multiples and hedging multiples...................804.6.2 Combination of two decision relevant multiples .......................815 Design of the empirical study .......................................................................845.1 The concept of value relevance ..............................................................845.1.1 Definition, interpretation, implementation ................................845.1.2 The link between value relevance and market efficiency..........865.2 Research hypotheses...............................................................................885.3 Research methodology............................................................................895.3.1 Methodology using single multiples..........................................905.3.2 Methodology using combined multiples....................................925.4 Data and sample......................................................................................936 <strong>Empirical</strong> results............................................................................................986.1 Cross-sectional analysis..........................................................................986.1.1 Absolute valuation accuracy ......................................................986.1.2 <strong>Equity</strong> value versus entity value multiples ..............................1016.1.3 Knowledge-related versus traditional multiples ......................1046.1.4 Forward-looking versus trailing multiples...............................1066.1.5 The effect of industry fineness.................................................1106.2 Industry analysis ...................................................................................1136.2.1 Industry-preferred multiples ....................................................1146.2.2 Single versus combined multiples ...........................................1176.3 Evaluation of empirical results .............................................................1216.3.1 Validation using U.S. data .......................................................1216.3.2 Limitations ...............................................................................124
ContentsXIII7 Conclusion.................................................................................................... 1277.1 Summary of findings............................................................................ 1277.2 Implications for practice....................................................................... 1297.3 Research outlook .................................................................................. 130Appendix A: ICB industry classification structure...................................... 131Appendix B: U.S. evidence.............................................................................. 135Appendix C: Definition of variables .............................................................. 151References......................................................................................................... 154
Page 1 and 2: Equity Valuation Using Multiples:An
Page 4 and 5: IVForewordframework. Schreiner demo
Page 6 and 7: VIPrefacement from my friends, whic
Page 8 and 9: Brief contents1 Introduction ......
Page 10 and 11: ContentsForeword...................
Page 14 and 15: List of figures 1Figure 1.1: Valuat
Page 16 and 17: Notations and abbreviationsPrice an
Page 18 and 19: XVIIINotations and abbreviationsM&A
Page 20 and 21: 2 Introductiongroup multiples must
Page 22 and 23: 4 Introductionexpenditures, amortiz
Page 24 and 25: 6 Introductiontion, therefore, aims
Page 26 and 27: 8 Introduction• Research question
Page 28 and 29: 10 Introductionscope of the solutio
Page 30 and 31: 12 IntroductionFigure 1.2: Outline
Page 32 and 33: 14 Literature reviewto earnings gro
Page 34 and 35: 16 Literature reviewserved market v
Page 36 and 37: 18 Literature reviewmultiple for ea
Page 38 and 39: 20 Literature reviewthe other. Chen
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44 Theoretical foundationsability c
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46 Theoretical foundationsposure to
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4 Comprehensive multiples valuation
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90 Design of the empirical study5.3
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92 Design of the empirical studyCha
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94 Design of the empirical studyand
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96 Design of the empirical studyass
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6 Empirical resultsThe following ch
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100 Empirical resultsous multiples
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102 Empirical resultsvalue multiple
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104 Empirical results6.1.3 Knowledg
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106 Empirical resultsknowledge-rela
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108 Empirical resultsTable 6.4: Per
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110 Empirical results6.1.5 The effe
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112 Empirical resultsThe second tes
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114 Empirical results6.2.1 Industry
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116 Empirical resultsExamination of
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118 Empirical resultscoefficients a
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120 Empirical results• The simple
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122 Empirical resultsTable 6.11: Co
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124 Empirical resultshowever, lapse
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126 Empirical resultsoped equity ma
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128 Conclusionmultiples, in particu
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130 Conclusion7.3 Research outlookE
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132 Appendix A: ICB industry classi
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134 Appendix A: ICB industry classi
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136 Appendix B: U.S. evidenceEquity
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138 Appendix B: U.S. evidencePerfor
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146 Appendix B: U.S. evidenceIndust
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148 Appendix B: U.S. evidenceFactor
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150 Appendix B: U.S. evidenceTime s
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152 Appendix C: Definition of varia
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ReferencesAboody, D., 2006. Financi
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156 ReferencesBernard, V.L., Thomas
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158 ReferencesDamodaran, A., 2001.
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160 ReferencesFama, E.F., 1976. Fou
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162 ReferencesGuo, R.-J., Lev, B.,
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164 ReferencesLev, B., Nissim, D.,
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166 ReferencesO’Hanlon, J., Peasn
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168 ReferencesRoss, S.A., Westerfie
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Curriculum VitaeName:Born:Andreas S
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Equity Valuation Using Multiples: An Empirical Investigation

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