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The emission of greenhouse gases (GHG), particularly carbon dioxide (CO2), within the atmosphere poses serious threats to society and the environment. In this paper, we examine the effect of carbon dioxide (CO2) emissions on the association between corporate social responsibility (CSR) and stock valuation. Using a sample of listed non‐financial US firms from 2002 through 2018, we find that CO2 emission plays a moderating role in reshaping the CSR‐stock valuation nexus. Further analysis showed that our results are robust for using alternate proxies of CSR, CO2, additional control and methods to alleviate endogeneity concerns. Additionally, we explored how increasing carbon footprints reshape this association only for firms with strong governance structures. Overall, our results indicate that the positive impact of CSR on stock valuation is overlaid by corporate CO2 emission. The practical and theoretical insights of this study were explored. [ABSTRACT FROM AUTHOR]

The objective of this study is to analyze the intrinsic value of sharia stocks in the property sector listed on the Sharia Securities List (DES), utilizing two distinct valuation methodologies: free cash flow to equity (FCFE) and relative valuation. The stocks selected for analysis include PT Metropolitan Kentjana Tbk (MKPI), PT Mega Manunggal Property Tbk (MMLP), and PT Pollux Properties Indonesia Tbk (POLL). In this study, the free cash flow to equity (FCFE) method was employed to ascertain the intrinsic value of the shares. This was achieved through the consideration of free cash flow, which was subsequently deducted to account for expenses pertaining to working capital and investment. In contrast, the relative valuation method involved the comparison of the intrinsic value of the shares with financial ratios such as the price-to-earnings ratio (PER) and the price-to-book value (PBV). The aforementioned approach was informed by a fundamental analysis, which involved the examination of macroeconomic conditions, industry conditions, and company conditions. The data was obtained from property companies listed on the Indonesia Sharia Stock Index (ISSI) for the period 2019-2022. The results indicated that the intrinsic value of MKPI stock, as determined by the FCFE method, was Rp. 24,134. This value suggests that the stock is overvalued, given that the market price was Rp. 27,200. The PER method yielded the following results: The intrinsic value of the stock is Rp. 59,461, indicating that it is undervalued. The PBV method yields an intrinsic value of IDR 7,515, indicating that the stock is overvalued. The MMLP Shares are valued using the FCFE method, which yields an intrinsic value of IDR 4,857, indicating that the stock is undervalued as the market price is IDR 298. The PER method yields an intrinsic value of IDR 686, indicating that the stock is undervalued. The intrinsic value of the stock is IDR 893, indicating that it is undervalued. The PBV method yields an intrinsic value of IDR 686, also indicating undervaluation. The POLL stock is undervalued according to the FCFE method, with an intrinsic value of IDR 251. This is due to the market price of IDR 147. Finally, the PER method yields an intrinsic value of IDR 109, indicating that the stock is undervalued. The intrinsic value of IDR 109 indicates that the stock is undervalued. The PBV method yields an intrinsic value of IDR 214, which also indicates undervaluation. In conclusion, the FCFE and Relative Valuation methods can be used to determine the fairness of Islamic stock prices in the property sector. The data was obtained from property companies listed on the Indonesia Sharia Stock Index (ISSI) for the period 2019-2022. The results indicated that the intrinsic value of MKPI stock, as determined by the FCFE method, was Rp. 24,134. This value suggests that the stock is overvalued, given that the market price was Rp. 27,200. The PER method yielded the following results. [ABSTRACT FROM AUTHOR]

This study investigates the stock valuation implications of the strategic spin-off plan involving Tawal, the biggest telecom tower infrastructure provider in Saudi Arabia, a 100% owned subsidiary of the Saudi Telecommunications Company (STC). Saudi Public Investment Fund (PIF) has sent a nonbinding offer to acquire 51% of Tawal's shares from the STC group, which is aligned with the Saudi Vision 2030 strategy. The findings of this research contribute nuanced insights into the relationship between spin-offs and stock valuation within the context of the telecommunications industry. By scrutinizing the anticipated impact of the Tawal spin-off on STC stock price, this study provides valuable information for investors and the STC group navigating the strategic decisions and their implications for the stock value. The research employs a comprehensive stock valuation framework with absolute-relative valuation, internal-external analysis, and risk assessment to gauge the potential effects on STC's respective stock values of the Tawal spin-off. Comparative analyses conducted within the telecommunications sector in Saudi Arabia offer valuable benchmarks for assessing the performance of STC Group. According to the intrinsic valuation approach and the Discounted Cash Flow model, STC stock price is undervalued compared to the stock price of 19th November 2023 by 38.3 SAR. Assuming the spin-off failed, obtaining the fair price at 41.5 SAR per share based on the DCF model and 54.2 SAR based on the relative valuation PE ratio. If the Spin-off is agreed upon and concluded, the fair price is valued at 42.6 SAR per share based on the DCF model. Sensitivity analysis and Monte Carlo simulation resulted in two results: the gross profit margin is a sensitive variable of the stock price movement, and the buy option is preferable. In line with that, STC has a solid holding organization, is financially healthy, and has sustained a competitive advantage. STC is expected to deploy the liquidity into investment and expansion in the region and globally, generating a higher return to satisfy the investor interest. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Techniques is the property of Republic of Iraq Ministry of Higher Education & Scientific Research (MOHESR) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Indonesia is the world's top producer and exporter of palm oil, generating 46 million tonnes of crude palm oil. PT SMART Tbk (SMAR) is one of Indonesia's big palm oil companies, with a plantation area of 136,402 hectares. The Indonesian government implemented the B35 biodiesel policy in February 2023, indicating there is potential for growth in the increased use of palm oil as a biodiesel blend. The positive sentiment from the B35 program, which will continue into the B40 program, is expected to boost domestic market demand for biodiesel, consequently impacting SMAR's sales revenue. The study aims to evaluate SMAR's business performance, intrinsic value, and propose solutions to close the value discrepancy gap. The study adopts a quantitative approach for stock valuation calculations and a qualitative approach for underlying assumptions. The analysis covers financial statement analysis, financial ratio analysis, PESTLE analysis, Porter’s five forces analysis, absolute valuation and relative valuation methods. Based on the FCFF analysis, SMAR's intrinsic value is Rp 8,609 while the market price is Rp 5,200, indicating that SMAR is undervalued. The relative valuation analysis using PER, PBV, and EV/EBITDA also indicates that SMAR is undervalued compared to similar companies in the palm oil industry. Overall, this indicates a potential investment opportunity for investors in SMAR shares. [ABSTRACT FROM AUTHOR]

The rise of digital streaming and investing in Indonesia has been exacerbated by the COVID-19 pandemic. One company involved in this unprecedented scenario is PT Global Mediacom TBK (BMTR). The everchanging digital streaming landscape and its massive growth create both an opportunity and threat for the company’s growth. The study aims to analyse stock valuation and performance of digital media in Indonesia pre-pots pandemic. To analyse this, the study utilized secondary data from the company’s annual report and various secondary sources. The data is processed using absolute valuation method of Discounted Cash Flow valuation and relative valuation method of Price-to-Earnings Ratio, Price-to-Book Value and EV/EBITDA. Using the absolute valuation method, it is found that the company’s stock is currently overvalued with an intrinsic value of Rp 169 in comparison to the actual price of Rp 278. One of the reasons for this is the company’s high beta stock of 1.8 which could signal a higher risk but higher return. Using the relative valuation method, all the metrics found that BMTR stock is undervalued. Being constantly below the industry average. However, the financial analysis as well as the relative valuations has found that the company is the most stable out of all the Indonesian listed digital streaming companies. This demonstrates the excellent business performance of the company. [ABSTRACT FROM AUTHOR]

In 2019 the pandemic Covid-19 caused a sharp decline in the Indonesian economy, yet in 2021 the economic condition started to recover, indicating ba y 7% increase in Gross Domestic Product and Consumer Confidence Index. One sector influenced by strong economic recovery is the property industry, furthermore, re government gave stimulus to boost property industry growth. PT Bumi Serpong Damai Tbk (BSDE) is a leading property developer having various projects anlandbankssk across Indonesia. Post Covid-19 era, the financial performance of PT Bumi Serpong Damai Tbk showed a good condition, the evidence is the increase in company profitability and decline in the debt. The fundamentals contrast with the stock price as the price declined even in the recovery phase. This condition encourages the writer to research PT Bumi Serpong Damai Tbk stock valuation and whether the share is classified as overvalued or undervalued. The research will utilize secondary such as financial reports, annual reports, public exposure from idx.co.id, trading view, and other literature sources. The methodology to process the data is Discounted Cash Flow valuation method to find the actual intrinsic value and value-added intrinsic value, to find the fair value using the Net Asset Value valuation method. The added value is a proposal to develop a housing project for Generation with the goal to increase the company share price. The actual intrinsic value is IDR 1,250 per sharwithth a 40% margin of safety and the added-value valuation method is IDR 1,612 per share with a wwiththa7.82% margin safety. res tof the thee f Net Asset Value method a fair value of IDR 2,554 per share and 118.29% margin of safety. Finally, the author will determine if the stock of PT Bumi Serpong Damai Tbk is undervalued or overvalued and give investment recommendations. [ABSTRACT FROM AUTHOR]

This study aims to determine the intrinsic value of PT Indofood CBP Sukses Makmur, Tbk equity during the Covid-19 pandemic. The research employed the qualitative approach utilizing the explanatory case study framework to achieve the research objective. The purposive sampling method was used to determine a single sample public firm as the study object which was chosen from the population of 677 public firms listed in Indonesia Capital Market per beginning 2020. The data collection was focused on gathering financial data related to the firm’s business activities. The data gathered was examined using the fundamental analysis framework which includes seven analyses on the business environment and the competition in the food-beverage industry in Indonesia; the firm competitive positioning; the company's growth strategy; the environmental, social, and government policy; the risks of the share ownership; the financial ratios; and the appraisal of entity’s intrinsic value. The results of our study indicated that the fair value of ICBP equity during the pandemic was undervalued. This research contributes to supporting the efficient market theory by proving that the firm market price has not reflected all accounting information, meaning that Indonesia's capital market remained in a semi-strong efficient state during the outbreak. The study implies, in a practical manner, that investors may adopt research findings to improve their decision on long-term equity investment in ICBP shares.

This report summarizes the finalists of the ISMS Gary Lilien Marketing Science Practice Prize Competition. This report summarizes the finalists of the INFORMS Society for Marketing Science (ISMS) Gary Lilien Marketing Science Practice Prize Competition, designed to identify, encourage, recognize, and reward the application of impactful marketing science to industry and noncommercial settings. These applications aim to showcase innovative and impactful examples of applications demonstrating the best of rigor and relevance that our profession produces. The 2020 winner described an application of corporate valuation with a customer-driven approach, whereas the 2022 winner reported a large-scale randomized controlled trial of the effect of front-of-pack labels on the nutritional quality of supermarket food purchases. The other four finalists include studies of dynamic structural analysis of salesforce management (2020), promotional campaign duration and word-of-mouth in solar panel adoption (2022), personalization in email marketing (2022), and reducing product returns through green nudges (2022). As the ISMS Vice Presidents of Practice, we draw several conclusions on how to further marketing science applications above and beyond the typical academic settings. History: Olivier Toubia served as the senior editor for this article. [ABSTRACT FROM AUTHOR]

Customer value refers to the economic value of the customer’s relationship with the firm. This study approaches the topic of customer value for measuring, managing, and maximizing customer contributions by proposing a customer valuation theory (CVT) based on economic principles that conceptualizes the generation of value from customers to firms. The author reviews the established economic theories for valuing investor assets (e.g., stocks) and draws a comparison to valuing customer contributions. Furthermore, the author recognizes the differences in the guiding principles between valuing stocks and valuing customers in proposing CVT. Using CVT, the author discusses the concept of customer lifetime value (CLV) as the metric that can provide a reliable, forward-looking estimate of direct customer value. In addition, economic models to estimate CLV, ways to manage CLV using portfolio management principles, and strategies to maximize CLV are discussed in detail. The author extends the customer value concept by discussing ways that a customer can add value to the firm indirectly through incentivized referrals, social media influence, and feedback. Finally, the benefits of CVT to multiple constituencies are offered. [ABSTRACT FROM AUTHOR]

Companies listed on the stock market must devote a great deal of attention to their market position. They must increase their competitive advantage in the undeniably key process of the issuance of stocks. As the issuance of preferred stocks has increased after the last crisis and in the current period of low interest rates in Europe, they are becoming more favoured investment instruments, we decided to analyse the real properties of preferred stocks in Europe in order to increase the efficiency of joint-stock companies. Using a dataset comprising all companies having both common and preferred stocks issued and traded on European markets between 2009- 2016, we determined the relationship of risk (measured by beta coefficients) and price volatility among common and preferred stocks and bonds in Europe. Our findings show beta coefficients of preferred stocks as systematically lower than beta coefficients of common stocks. Considering a difference of up to 10% as negligible, however, preferred stocks showed a similar or higher beta coefficient than corresponding common stocks of the same company in 53% of cases, whereas for 33% of cases, the difference is only ±10%. Coefficients of variation in prices showed a similar relationship, with only a negligible portion of preferred stocks bearing fixed (stable) dividends. This result implies that currently traded preferred stocks in Europe in fact do not possess such characteristics they are typically said to have, and in many cases they incur as comparable a risk as do common stocks. This essential information should help to increase the efficiency and competitiveness of joint-stock companies.

We investigate the valuation effects of debt issues on the issuing firms' common stock using a sample of Turkish issuers. For the sample of non-financial firms, we find no significant wealth effects for debt issues around the announcement dates. However, market reactions are more positive when information asymmetry between firm managers and outside investors is low, agency costs are high, and when debt issues are likely to carry positive information about firms' prospects. These results support pecking order, signaling, and agency theories of capital structure. In additional tests, we find positive market reactions to debt issue announcements of financial firms. [ABSTRACT FROM AUTHOR]

Computations of risk measures in the context of the dividend valuation model is a crucial aspect to deal with when investors decide to buy a share of common stock. This is achieved by using a Markov chain model of growth-dividend evolution, imposing an assumption that controls the growth of the dividend process and in turn allows for the computation of the moments of the price process and the fulfillment of a set of transversality conditions which allows avoiding the presence of speculative bubbles in the market. The probability distribution of the fundamental value of the stock is recovered by solving a moment problem, based on the solution of a maximum-entropy approach from which it is possible to compute classical risk measures based on these fundamental variables. The methodology is applied to real dividend data from the S&P 500 index. Results show that our model provides complete information about the fundamental price not limited to its expectation. • Dividend valuation based on a Markov chain model of the dividend growth evolution. • Computation of the moments of the price process. • Probability distribution of the fundamental value of a stock. • Moment problem via a maximum-entropy approach. • Risk measures based on the fundamental value of the stock. [ABSTRACT FROM AUTHOR]

Con el presente artículo se pretende exponer un proceso para la valoración de acciones de las empresas del sector bancario mediante múltiplos financieros empresariales, sustentado en variadas técnicas estadísticas tales como simulaciones de Montecarlo y modelos bayesianos de valoración continua de los indicadores relativos en el tiempo, con el fin de hacer proyecciones de escenarios lo más acertado posible en el mediano plazo. En cuanto a la metodología, el enfoque de la investigación fue cuantitativo, el tipo de estudio descriptivo-correlacional, y el diseño de la investigación fue no experimental. En virtud de que para llevar a cabo la valoración del desempeño y evolución de los múltiplos financieros en el tiempo, se deben considerar empresas similares, se decidió realizar previamente un análisis de cluster, para verificar posibles agrupaciones entre las entidades bancarias de acuerdo con las variables. || This article intends to expose a process for the valuation of shares of the companies of the banking sector through business financial multiples, based on various statistical techniques such as Monte Carlo simulations and Bayesian models of continuous valuation of the relative indicators over time, with in order to make scenario projections as successful as possible in the medium term. Regarding the methodology, the research approach was quantitative; the type of descriptive-correlational study, and the research design was non-experimental. Because in order to carry out the assessment of the performance and evolution of the financial multiples over time, similar companies must be considered, it was decided to previously conduct a cluster analysis, to verify possible groupings between the banking entities according to the variables.

This paper deals with the phenomenon of excessive optimism in brokerage valuations, which is manifested by one-sided errors in the valuation of securities in reference to the real price achieved by the particular stock in the horizon of one year. The phenomenon of over-optimism is complex both from the perspective of the individual characteristics of stock market analysts as well as the psychological aspects of market functioning and the mechanisms that determine the volatility of stock prices. Due to the wide range of factors affecting the occurrence of the examined phenomenon, the authors focus only on the market aspects influencing the occurrence of excessive optimism in brokerage recommendations. The research examines over 10,000 recommendations for companies from the Warsaw Stock Exchange and from more than 40 financial institutions which evaluated companies in the period 2000-2014. For the purposes of analyzes, over-optimism in valuations is defined as an overestimation of the target price in the case of positive recommendations and as an underestimation of the price decline in the case of negative ones. The results confirmed the hypotheses of the heterogeneity of the phenomenon of excessive optimism both for different economic sectors and individual financial institutions. The authors see it as a good result considering the fact that regression uses only variables related to market characteristics of the recommendations issued, omitting other spheres influencing the occurrence of excessive optimism among analysts.

Copyright of Economic Annals-XXI / Ekonomìčnij Časopis-XXI is the property of Institute of Society Transformation and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Companies listed on the stock market must devote a great deal of attention to their market position. They must increase their competitive advantage in the undeniably key process of the issuance of stocks. As the issuance of preferred stocks has increased after the last crisis and in the current period of low interest rates in Europe, they are becoming more favoured investment instruments, we decided to analyse the real properties of preferred stocks in Europe in order to increase the efficiency of joint-stock companies. Using a dataset comprising all companies having both common and preferred stocks issued and traded on European markets between 2009- 2016, we determined the relationship of risk (measured by beta coefficients) and price volatility among common and preferred stocks and bonds in Europe. Our findings show beta coefficients of preferred stocks as systematically lower than beta coefficients of common stocks. Considering a difference of up to 10% as negligible, however, preferred stocks showed a similar or higher beta coefficient than corresponding common stocks of the same company in 53% of cases, whereas for 33% of cases, the difference is only ±10%. Coefficients of variation in prices showed a similar relationship, with only a negligible portion of preferred stocks bearing fixed (stable) dividends. This result implies that currently traded preferred stocks in Europe in fact do not possess such characteristics they are typically said to have, and in many cases they incur as comparable a risk as do common stocks. This essential information should help to increase the efficiency and competitiveness of joint-stock companies. [ABSTRACT FROM AUTHOR]

• This study examines the financial opportunities arising from the new artificial intelligence (AI) innovation. • We present the current and projected AI revenue for the upcoming decade. • We introduce a valuation model for AI stocks and ETFs, incorporating both AI fundamental and sentiment analyses. • We offer two primary models for stock valuation adoption. • The study potentially signals the financial market's entry into an AI bubble. This study examines the financial opportunities arising from the new Artificial Intelligence (AI) innovation. Firstly, we present the current and projected AI revenue for the upcoming decade. Secondly, we introduce a valuation model for AI stocks and ETFs, incorporating both AI fundamental and sentiment analyses. We offer two primary models for stock valuation adoption. Our analyses can serve as a benchmark framework for stock valuations and their influence on AI technology. This study holds particular significance as we witness an enthusiastic embrace of AI technology, potentially signaling the financial market's entry into an AI bubble. [ABSTRACT FROM AUTHOR]

The price of common stocks, defined as the sum of all future discounted dividends, is at the heart of both the dividend discount models (DDM) and the stochastic DDM (SDDM). Gordon and Shapiro (Manag Sci 3:102–110 1956) assume a deterministic and constant dividends' growth rate, whereas Hurley and Johnson (Financ Anal J 4:50–54 1994, J Portf Manag 25(1)27–31 1998) and Yao (J Portf Manag 23(4)99–103 1997) introduce randomness by letting the growth rate be a finite-state random variable and random dividends behave in a Markovian fashion. In this second case expected stock price is determined, but what if higher-order moments are needed? In order to address a number of financial topics, the present contribution presents an explicit formula for the covariance between (possibly) correlated stock prices. [ABSTRACT FROM AUTHOR]

Our paper employs a data set that comprises real‐time data, which, in our study, is defined as the best known data available to investors at the time of making decision. The research was inspired by comments by industry leaders at an international conference in finance in Vietnam in 2016, basically implying that academic research findings were not useful to investors because they had not done in the way that investors think and do. Drawing on an alike experiment study using real‐time data for a period from October 2010 to April 2014, our paper documents that the value and liquidity effect do not exist in Vietnam, and the size effect is weak. Specifically, we find that growth and high‐liquidity stocks outperform and do not find strong evidence for the outperformance of small stocks. This finding contradicts the general literature, which suggests that value, low liquidity, and small stocks outperform but supports similar contradicting findings for emerging markets. The findings from our research are important to investors in Vietnam market because they are drawn on the decision‐making basis that investors in this market normally do. Our research findings also suggest the use of a multifactor pricing model that is relevant for valuing stocks in Vietnam. In addition, to check the reliability of our data set and the robustness of our conclusions, we repeated the same procedure using two samples of historical data and compared with results from our data. The additional analysis confirms the reliability of our data and findings. [ABSTRACT FROM AUTHOR]

Company value creation is considered a significant metric to measure corporate success. One possible method is the launch of innovative products that potentially attract new customers and capture a reasonable market share. This discussion highlights examples wherein heightening innovation activities through incremental increases in Research and Development spending, the number of innovative products in the sales funnel, as well as those innovative products in the marketplace impact company value. Yet, another company value driver, worthy of consideration, is the effective management of innovation processes. The Stage Gate Control Process embodies a recognized framework for effective innovation process management. Central to this manuscript is the case of PharmaComm, a pharmaceutical company that developed a customized version of the Stage Gate Control Process. By this way PharmaComm accelerated new products development and shortened time to launch. In adapting this methodology, it multiplied company value during the acquisition process.

The aim of this paper is to analyze the relevance of dividend discount model, i.e. its specific form in stock price estimation known as Gordon growth model. The expected dividends can be a measure of cash flows returned to the stockholder. In this context, the model is useful for assessment of how risk factors, such as interest rates and changing inflation rates, affect stock returns. This is especially important in case when investors are value oriented, i.e. when expected dividends are theirmain investing drivers. We compared the estimated with the actual stock price values and tested the statistical significance of price differences in 199 publicly traded European companies for the period2010-2013. Statistical difference between pairs of price series (actual and estimated) was tested using Wilcoxon and Kruskal-Wallis tests of median and distribution equality. The hypothesis that Gordon growth model cannot be reliable measure of stock price valuation on European equity market over period of 2010-2013 due to influence of the global financial crisis was rejected with 95% confidence. Gordon growth model has proven to be reliable measure of stock price valuation even over period of strong global financial crisis influence.

A common practice in business valuation and the determination of fair rates of return by regulatory agencies is to use the capital asset pricing model (CAPM) with the ad hoc addition of a country risk premium. The present paper documents this practice in the valuation reports required in public acquisition offers available on the CVM (Brazilian Securities and Exchange Commission) website. Multiple linear regression is used with monthly returns for stock shares of 204 firms listed on the BM&FBovespa (Brazilian Stock Exchange). The period covered is from January 2009 to December 2013, and the results indicate that there is a premium for Brazilian risk that is not completely reflected in Ibovespa returns for only 17 securities. Hence, if one uses the local market index when estimating a firm’s cost of equity, it would be both redundant and incorrect to add a country risk premium. The paper concludes with a real company example in which the adoption of the conventional approach – with a country risk premium added – would lead to a 17% pricing error.

This paper focuses on the linkage between equity prices and fundamentals for 27 individual shares belonging to the French stock price index (CAC40). To assess fundamental value, the traditional dividend discount model (DDM) is coupled with the arbitrage pricing theory (APT), which assumes that investors hold efficient portfolios. This yields a simple equity valuation relationship for which the APT determines the long-term risk premium included in the DDM. Accordingly, equity risk premia are determined by common factors reflecting the non diversifiable risk. These factors are not a priori identified by the theory, and therefore must be exhibited through an empirical analysis. Four domestic and three international common factors are found, all being among those identified by empirical analyses of the APT in the literature. While studies related to stock price indices showed that DDM fundamental values are very smooth compared to stock indices, our DDM-APT model reproduces both trends and major fluctuations of share prices. Further, as for studies based on stock indices, a mean-reverting process of equity prices towards fundamentals is highlighted, but the linear error correction model that was considered contains shortcomings suggesting a more complex adjustment process. [ABSTRACT FROM AUTHOR]

In Korea, unlisted stock shares are accepted as payment for inheritance tax. In the case of insufficient cash, a taxpayer can pay the government with listed or unlisted stocks (hereinafter referred to as “tax payment in kind”). The drawback of this tax payment system is that receiving tax paid with stocks is subject to the valuation of the government and selling the stocks to an open market requires another valuation. The results of these two valuations show considerable differences, and, therefore, the selling price in the open market is very low. This study analyzes how taxpayers recognize the differences in the valuation results of these unlisted stocks and how the differences affect the pricing for repurchasing the stocks from the open market. Results show that high valuation of unlisted stocks in tax payment in kind drives buyers to lower the purchasing price in the open market. This finding implies a problem in the government’s valuation method of unlisted stocks collected as tax. [ABSTRACT FROM AUTHOR]

The article mentions several methods of a fundamental analysis used to value stocks. It primarily focuses on the historical model. This model enables undervalued, correctly valued and overvalued stocks to be identified. The model is further modified in the article, using selected accounting indicators. The modified model versions are applied to selected stocks in the SPAD segment, Prague Stock Exchange, within the 2005-2010 period. Empirical analysis is applied to a comparison of accuracy of the accounting indicator value estimates and accuracy of stock intrinsic value estimates, both separately for each stock and accounting indicator. The comparisons of accuracy of the accounting indicator value estimates and the accuracy of the stock intrinsic value estimates are also done based on the length of applied time period. With respect to the obvious fierce competition between stock issuers within the financial markets, the model enables potential investors, who are to select from an extensive offer of stocks, to make better informed investment decisions.

Initial public offerings (IPO) of financial instruments on international financial markets represent one of the most important financing channels not only for developed countries, but for emerging ones too. The most sensitive element of international IPOs that could determine the success or failure of them is the initial price mentioned in the prospectus. This initial price used to sell securities to individual or institutional investors is always compared with real market price and is essential for investment decision. For this reason, in almost cases of international IPOs, the underpricing effect is present. This paper discusses the problem of underpricing effect and highlights the most sensitive problems with securities’ valuation methods that are commonly used by financial managers to decide and to act in this case.

Historical stock prices have long been used to evaluate a stock's future returns as well as the risks associated with those returns. Similarly, historical dividends have been used to evaluate the intrinsic value of a stock using, among other methods, a dividend discount model. In this chapter, we propose an alternate use of the dividend discount model to enable an investor to assess the risks associated with a particular stock based on its dividend history. In traditional applications of the dividend discount model for stock valuation, the value of a stock is the net present value of its future cash dividends. We propose an alternative approach in which we calculate the internal rate of return for a stream of future cash dividends assuming the current stock price. We use a bootstrapping approach to generate a stream of future cash dividends, and use a Monte Carlo simulation approach to run multiple trials of the model. The probability distribution of the internal rates of return obtained from the simulation model provides an investor with an expected percentage return and the standard deviation of the return for the stock. This allows an investor to not only compare the expected internal rates of return for a group of stocks but to also evaluate the associated risks. We illustrate this internal rate of return approach using stocks that make up the Dow Jones Industrial Average. [ABSTRACT FROM AUTHOR]

Employing a novel approach of integrating regime analysis with event analysis, we examine the overall valuation pattern of stocks that traverse the short-sale-ban and the no-ban regime, employing data from the Hong Kong market. Switching from the ban to the no-ban regime, stocks initially undergo net cumulative undervaluation and then revert to fundamental valuation. Switching from the no-ban to the ban regime, stocks initially experience net cumulative excessive overvaluation and then revert to permanent overvaluation. The amount of net cumulative undervaluation is greater than the amount of net cumulative excessive overvaluation. This documented overall pattern offers a broad perspective on short-sale constraints and stock valuation. [ABSTRACT FROM PUBLISHER]

Michael Pirron is CEO of Impact Makers, an IT consulting firm based in Virginia. Impact Makers decided to reincorporate as a benefit corporation when Virginia passed the legislation. In this interview with Professor Daryl Koehn from DePaul University, Pirron discusses why he chose to reincorporate and their organization's decision to give all their profits to charity. To do this, Impact Makers set up a new financial innovation to protect the social purpose of the organization. They gave all their common stock to two public charities and if the organization is ever sold, all the proceeds would go to charitable organizations in their community. [ABSTRACT FROM AUTHOR]

Documenting the disposition effect for a large sample of mutual fund managers in the United States, we find that stock-level characteristics explain the cross-sectional variation of the effect. The disposition effect, which is the tendency to sell winner stocks too early and hold on to loser stocks for too long, is more pronounced for fund managers who invest in stocks that are more difficult to value. Using different measures of stock and market uncertainty, we show that mutual fund managers display a stronger disposition-driven behavior when stocks are more difficult to value. We also find that the level of the disposition effect is monotonically increasing with the level of systematic risk (i.e., beta). In addition, we document that the trading behavior of mutual fund managers is partly driven by attention-grabbing stocks (dividend-paying stocks). Overall, our results suggest that stock-level uncertainty and trading of attention-grabbing stocks amplify the disposition effect and that differences in the effect can be explained by mutual fund managers' investment styles. Given that mutual funds hold a large fraction of the U.S. equity market, our findings add to the ongoing discussion whether professional investors can create stock mispricings and shed new light on market efficiency. [ABSTRACT FROM PUBLISHER]

One of the most significant issues in investment management is stock valuation. Investors and shareholders can value their own shares based on stock valuation models and make decisions on stock trading accordingly. This study attempts to examine the relationship between stock valuation and a company's management. In this regard, the present study uses field and library research methods, and examines 25 companies listed in Tehran Stock Exchange from the years 2009 to 2013 along with 125 observations. The results of this study suggest that managers’ success in stock valuation primarily depends on the correct understanding of influential resources and it is recommended that managers increase the value of their company's stock by the prober use and combination of factors effective in stock valuation according to the information of the company. [ABSTRACT FROM AUTHOR]

This research contributes to understanding of the impact of differences between International Financial Reporting Standards (IFRS) and the United States of America's Generally Accepted Accounting Principles (US - GAAP) on perceived company performance, and how investors assess those differences. Such impact is studied and illustrated through a case study of Siemens AG's 20-F form for fiscal year 2007. This case study recognizes and addresses the different ratio results from the two different standards and the impact the varying results may have on investors. The results reveal that perceived company profitability based on IFRS was higher than that based on US- GAAP and that profitability measures based on US-GAAP are more value relevant. US-GAAP income is found to be more conservative than IFRS income in European Union (EU) and more valued by the market in this study. As a result, investors do not put as much emphasis on IFRS earnings as they do on US-GAAP earnings. Market forces act in a way to keep the stock price of Siemens the same in Germany and on the New York Stock Exchange (NYSE) through arbitrage. These market forces will act as an equalizer even though IFRS earnings are not as strong, dollar per dollar, as the US-GAAP earnings for Siemens. This may lead to lower earnings quality under IFRS. [ABSTRACT FROM AUTHOR]

In this study, we hypothesize and find that financial statement analysis of firm profitability drivers applied at the aggregate level yields timely insights that are relevant for forecasting real economic activity. We first show that focusing on the 100 largest firms offers a cost-effective way to extract information embedded in accounting profitability data of the entire stock market portfolio. We then show that accounting profitability data aggregated across the 100 largest firms have predictive content for subsequent real Gross Domestic Product (GDP) growth. We also show that stock market returns have predictive content for future real GDP growth, while their predictive power varies with the length of the measurement window with annual stock market returns being the most powerful. Importantly, we find that the predictive content of our indices of aggregate accounting profitability drivers is incremental to that of annual stock market returns. An in-depth investigation of consensus survey forecasts shows that professional macro forecasters revise their expectations of real economic activity in the direction of the predictive content of aggregate accounting profitability drivers and stock market returns. Although macro forecasters are fully attuned to stock market return data, their forecasts of real GDP growth can be improved in a statistically and economically significant way using our indices of aggregate accounting profitability drivers. Our findings suggest that professional macro forecasters and stock market investors do not fully impound the predictive content of aggregate accounting profitability drivers when forecasting real economic activity. In additional analysis, we examine the association between stock market returns and the portion of subsequent real GDP growth that is predictable based on our indices of aggregate accounting profitability drivers but that is not anticipated by stock market investors. We find that this portion is positively related to stock market returns, suggesting that the macro predictive content of aggregate accounting profitability drivers is relevant for stock valuation. Overall, our study brings In this study, we hypothesize and find that financial statement analysis of firm profitability drivers applied at the aggregate level yields timely insights that are relevant for forecasting real economic activity. We first show that focusing on the 100 largest firms offers a cost-effective way to extract information embedded in accounting profitability data of the entire stock market portfolio. We then show that accounting profitability data aggregated across the 100 largest firms have predictive content for subsequent real Gross Domestic Product (GDP) growth. We also show that stock market returns have predictive content for future real GDP growth, while their predictive power varies with the length of the measurement window with annual stock market returns being the most powerful. Importantly, we find that the predictive content of our indices of aggregate accounting profitability drivers is incremental to that of annual stock market returns. An in-depth investigation of consensus survey forecasts shows that professional macro forecasters revise their expectations of real economic activity in the direction of the predictive content of aggregate accounting profitability drivers and stock market returns. Although macro forecasters are fully attuned to stock market return data, their forecasts of real GDP growth can be improved in a statistically and economically significant way using our indices of aggregate accounting profitability drivers. Our findings suggest that professional macro forecasters and stock market investors do not fully impound the predictive content of aggregate accounting profitability drivers when forecasting real economic activity. In additional analysis, we examine the association between stock market returns and the portion of subsequent real GDP growth that is predictable based on our indices of aggregate accounting profitability drivers but that is not anticipated by stock market investors. We find that this portion is positively related to stock market returns, suggesting that the macro predictive content of aggregate accounting profitability drivers is relevant for stock valuation. Overall, our study brings [ABSTRACT FROM AUTHOR]