Indirect Firm Valuation and Earnings Stability

Karel Janda and Micha Kaszas

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates statistical significance of earnings stability in the within-company indirect valuation method. We empirically establish superiority of a within-company earnings multiple valuation technique for the relatively most stable companies. Favourable empirical results are robust against different means of operationalization of the stability construct and valuation multiples. Results of this paper indicate that the indirect within-company price-to-earnings valuation yields the most precise and the most accurate value estimates.

Keywords: Investment Decision; Company Valuation; Earnings Properties (search for similar items in EconPapers)
JEL-codes: G11 G12 M41 (search for similar items in EconPapers)
Date: 2017-03-01
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:77234

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