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The Equity Valuation Accuracy among Multiple Screening Models: A study from an Emerging Stock Market

Abstract: Over the past 3 decades, none of valuation models is accepted as the most accurate valuation model. The most common debate in academic area is about Discounted Cash Flow (DCF) and Residual Income Valuation (RIV). Multiple screenings, a valuation model that common for practitioners are seld...

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Main Authors: Brahmana, Rayenda Khresna, Hooy, Chee-Wooi
Format: E-Article
Language:English
Published: Medwell Journals 2011
Subjects:
HC Economic History and Conditions
Online Access:http://ir.unimas.my/id/eprint/9687/1/The%20Equity%20Valuation%20Accuracy%20among%20Multiple%20Screening%20Models%20A%20Study%20from%20an%20Emerging%20Stock%20Market%28abstract%29.pdf
http://ir.unimas.my/id/eprint/9687/
http://medwelljournals.com/abstract/?doi=ibm.2011.50.57
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spelling my.unimas.ir.96872016-04-14T06:55:39Z http://ir.unimas.my/id/eprint/9687/ The Equity Valuation Accuracy among Multiple Screening Models: A study from an Emerging Stock Market Brahmana, Rayenda Khresna Hooy, Chee-Wooi HC Economic History and Conditions Abstract: Over the past 3 decades, none of valuation models is accepted as the most accurate valuation model. The most common debate in academic area is about Discounted Cash Flow (DCF) and Residual Income Valuation (RIV). Multiple screenings, a valuation model that common for practitioners are seldom investigated. This research conducted a test to investigate the best multiple screening models in term of valuation accuracy. Hypothetically, multiple screening models are classified into Price Earnings Ratio (PER) approach, Price to Sales Ratio (PSR) and Price to Book Value (PBV) ratio. After conducting the investigation in pooled data, PER method is superior in term of valuation accuracy compare to PSR and PBV. In industrial classification, PBV outperform the accuracy of PER and PSR approach in 17 industrial categories. Meanwhile PER which outstanding in accuracy of pooled data is only superior in 10 industrial categories. Thus, PER method still can be used in those 17 PBV industrial categories because of the small differences. But, PBV cannot be used as valuation method in 3 industrial categories. This research still needs further discussion, especially, the discussion of using non-linear approach using forecasted value driver and using combination of value drivers. Medwell Journals 2011 E-Article NonPeerReviewed text en http://ir.unimas.my/id/eprint/9687/1/The%20Equity%20Valuation%20Accuracy%20among%20Multiple%20Screening%20Models%20A%20Study%20from%20an%20Emerging%20Stock%20Market%28abstract%29.pdf Brahmana, Rayenda Khresna and Hooy, Chee-Wooi (2011) The Equity Valuation Accuracy among Multiple Screening Models: A study from an Emerging Stock Market. International Business Management, 5 (2). pp. 50-57. ISSN 1993-5250 http://medwelljournals.com/abstract/?doi=ibm.2011.50.57 DOI: 10.3923/ibm.2011.50.57
institution Universiti Malaysia Sarawak
building Centre for Academic Information Services (CAIS)
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Malaysia Sarawak
content_source UNIMAS Institutional Repository
url_provider http://ir.unimas.my/
language English
topic HC Economic History and Conditions
spellingShingle HC Economic History and Conditions
Brahmana, Rayenda Khresna
Hooy, Chee-Wooi
The Equity Valuation Accuracy among Multiple Screening Models: A study from an Emerging Stock Market
description Abstract: Over the past 3 decades, none of valuation models is accepted as the most accurate valuation model. The most common debate in academic area is about Discounted Cash Flow (DCF) and Residual Income Valuation (RIV). Multiple screenings, a valuation model that common for practitioners are seldom investigated. This research conducted a test to investigate the best multiple screening models in term of valuation accuracy. Hypothetically, multiple screening models are classified into Price Earnings Ratio (PER) approach, Price to Sales Ratio (PSR) and Price to Book Value (PBV) ratio. After conducting the investigation in pooled data, PER method is superior in term of valuation accuracy compare to PSR and PBV. In industrial classification, PBV outperform the accuracy of PER and PSR approach in 17 industrial categories. Meanwhile PER which outstanding in accuracy of pooled data is only superior in 10 industrial categories. Thus, PER method still can be used in those 17 PBV industrial categories because of the small differences. But, PBV cannot be used as valuation method in 3 industrial categories. This research still needs further discussion, especially, the discussion of using non-linear approach using forecasted value driver and using combination of value drivers.
format E-Article
author Brahmana, Rayenda Khresna
Hooy, Chee-Wooi
author_facet Brahmana, Rayenda Khresna
Hooy, Chee-Wooi
author_sort Brahmana, Rayenda Khresna
title The Equity Valuation Accuracy among Multiple Screening Models: A study from an Emerging Stock Market
title_short The Equity Valuation Accuracy among Multiple Screening Models: A study from an Emerging Stock Market
title_full The Equity Valuation Accuracy among Multiple Screening Models: A study from an Emerging Stock Market
title_fullStr The Equity Valuation Accuracy among Multiple Screening Models: A study from an Emerging Stock Market
title_full_unstemmed The Equity Valuation Accuracy among Multiple Screening Models: A study from an Emerging Stock Market
title_sort equity valuation accuracy among multiple screening models: a study from an emerging stock market
publisher Medwell Journals
publishDate 2011
url http://ir.unimas.my/id/eprint/9687/1/The%20Equity%20Valuation%20Accuracy%20among%20Multiple%20Screening%20Models%20A%20Study%20from%20an%20Emerging%20Stock%20Market%28abstract%29.pdf
http://ir.unimas.my/id/eprint/9687/
http://medwelljournals.com/abstract/?doi=ibm.2011.50.57
_version_ 1644510793198206976
score 13.244368

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