AN EMPIRICAL STUDY OF RELATIONSHIP BETWEEN SHARE PRICE AND INTRINSIC VALUE OF COMPANY

Ping-fu (Brian) Lai, and Wing Ka Wong
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Ping-fu (Brian) Lai,: Division of Business and Management, United International College, Beijing Normal University Hong Kong Baptist University
Wing Ka Wong: ABRS International Consultancy

Studii Financiare (Financial Studies), 2015, vol. 19, issue 4, 65-92

Abstract: A company price should be determined by value. Value can be calculated by different valuation method. Investors need to understand the valuation method usage and calculation. In fact, there is no one-valuation method to estimate value of companies. Valuation can be related with the companies’ price. Comparable valuation can show signals of companies in different positions. Hong Kong companies in different industries may suffer from different factors. Different valuation method is estimation in different situation or data source to transfer as value of companies. Valuation and share price become supportive relationship and explanation of companies’ value. Ten valuation methods can be summarized as typical approaches. There is a simple analysis for different type valuation to have different effect on share price and companies valuation. Also, the research mentioned that valuation is related to share price. The relationship can be a signal for companies and investors’ trend study or business analysis. Also, research summaries residual difference with ten valuations, correlation for valuation and share price and regression model for valuation and share price. The research can base on different testing to carry out conclusion and finding on valuation application and share price. Hong Kong Thirty companies from 2006 to 2010 can be tested for research purposes.

Keywords: intrinsic value; finance; valuation; share price (search for similar items in EconPapers)
JEL-codes: G1 G2 M4 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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