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Evaluating Malaysian Palm Oil Industry using Discounted Cash Flow Approach

This research is a case study involving an oil palm plantation company (Case Company) which owns seven oil palm plantations. These seven plantations had all been valued by Licensed Property Valuers (LPV) who used the market comparison method. The research study applies the Discounted Cash Flow Metho...

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Main Authors: Sharon Rebecca Tan, Hiram Ting, Nelson Lajuni, Yusman Yacob, Joseph Wee-Siong Hii
Format: Article
Language:English
Published: 2018
Subjects:
H Social Sciences (General)
HG Finance
Online Access:https://eprints.ums.edu.my/id/eprint/21910/1/Evaluating%20Malaysian%20Palm%20Oil%20Industry%20using%20Discounted%20Cash%20Flow%20Approach.pdf
https://eprints.ums.edu.my/id/eprint/21910/
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spelling my.ums.eprints.219102019-04-30T05:19:28Z https://eprints.ums.edu.my/id/eprint/21910/ Evaluating Malaysian Palm Oil Industry using Discounted Cash Flow Approach Sharon Rebecca Tan Hiram Ting Nelson Lajuni Yusman Yacob Joseph Wee-Siong Hii H Social Sciences (General) HG Finance This research is a case study involving an oil palm plantation company (Case Company) which owns seven oil palm plantations. These seven plantations had all been valued by Licensed Property Valuers (LPV) who used the market comparison method. The research study applies the Discounted Cash Flow Method (DCF Method), a quantitative financial model as a business valuation method, to value the seven plantations. This research study starts out by looking for an alternative or comparative business valuation method so that it can be used as an additional valuation tool in the loan credit evaluation process, in addition to the LPV valuation. The test results show the two sets of values to be significantly similar. The results of the study supported the DCF Method for valuation for the palm oil plantations. This finding is important because it is of tremendous benefit to both practitioners, especially, those in the banking industry, and the academia to have a financial business valuation model that can be used to enhance the loan credit evaluation process. This gives the confidence that the DCF Method can be considered to be used for valuation purposes for bank loan collaterals. However, because of some limitations of this research study, this study should be replicated for further studies to be conducted to further reaffirm the proposal for the DCF Method to be completely accepted as a business valuation approach for bank credit purposes. 2018 Article PeerReviewed text en https://eprints.ums.edu.my/id/eprint/21910/1/Evaluating%20Malaysian%20Palm%20Oil%20Industry%20using%20Discounted%20Cash%20Flow%20Approach.pdf Sharon Rebecca Tan and Hiram Ting and Nelson Lajuni and Yusman Yacob and Joseph Wee-Siong Hii (2018) Evaluating Malaysian Palm Oil Industry using Discounted Cash Flow Approach. International Journal of Finance and Economics (167). pp. 17-25. ISSN 1450-2887
institution Universiti Malaysia Sabah
building UMS Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Malaysia Sabah
content_source UMS Institutional Repository
url_provider http://eprints.ums.edu.my/
language English
topic H Social Sciences (General)
HG Finance
spellingShingle H Social Sciences (General)
HG Finance
Sharon Rebecca Tan
Hiram Ting
Nelson Lajuni
Yusman Yacob
Joseph Wee-Siong Hii
Evaluating Malaysian Palm Oil Industry using Discounted Cash Flow Approach
description This research is a case study involving an oil palm plantation company (Case Company) which owns seven oil palm plantations. These seven plantations had all been valued by Licensed Property Valuers (LPV) who used the market comparison method. The research study applies the Discounted Cash Flow Method (DCF Method), a quantitative financial model as a business valuation method, to value the seven plantations. This research study starts out by looking for an alternative or comparative business valuation method so that it can be used as an additional valuation tool in the loan credit evaluation process, in addition to the LPV valuation. The test results show the two sets of values to be significantly similar. The results of the study supported the DCF Method for valuation for the palm oil plantations. This finding is important because it is of tremendous benefit to both practitioners, especially, those in the banking industry, and the academia to have a financial business valuation model that can be used to enhance the loan credit evaluation process. This gives the confidence that the DCF Method can be considered to be used for valuation purposes for bank loan collaterals. However, because of some limitations of this research study, this study should be replicated for further studies to be conducted to further reaffirm the proposal for the DCF Method to be completely accepted as a business valuation approach for bank credit purposes.
format Article
author Sharon Rebecca Tan
Hiram Ting
Nelson Lajuni
Yusman Yacob
Joseph Wee-Siong Hii
author_facet Sharon Rebecca Tan
Hiram Ting
Nelson Lajuni
Yusman Yacob
Joseph Wee-Siong Hii
author_sort Sharon Rebecca Tan
title Evaluating Malaysian Palm Oil Industry using Discounted Cash Flow Approach
title_short Evaluating Malaysian Palm Oil Industry using Discounted Cash Flow Approach
title_full Evaluating Malaysian Palm Oil Industry using Discounted Cash Flow Approach
title_fullStr Evaluating Malaysian Palm Oil Industry using Discounted Cash Flow Approach
title_full_unstemmed Evaluating Malaysian Palm Oil Industry using Discounted Cash Flow Approach
title_sort evaluating malaysian palm oil industry using discounted cash flow approach
publishDate 2018
url https://eprints.ums.edu.my/id/eprint/21910/1/Evaluating%20Malaysian%20Palm%20Oil%20Industry%20using%20Discounted%20Cash%20Flow%20Approach.pdf
https://eprints.ums.edu.my/id/eprint/21910/
_version_ 1760229902250934272
score 13.211869

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