Share Valuation Using the Comparative Method

Ohodnocovanie akcií porovnávacou metódou

Jana Marková and Božena Hrvoľová

Acta Oeconomica Pragensia, 2016, vol. 2016, issue 6, 16-37

Abstract: The comparative method is one of the methods of assessment of equity securities in theory and practice. The practical application of the comparative method is arranged in MS Decree No. 492/2004 Coll. on the establishment of the universal value of property and in Act No. 431/2002 Coll. on accounting, as amended by later regulations. According to this method, internal (general, real) value is derived from information on specific prices or values of shares of similar companies. The comparative method can be applied without serious problems only provided that the differences between the companies are small; otherwise, its use has been problematic. To find a comparable public limited company on a mature capital market, where the number of traded comparable companies is high, is not a problem. It is very difficult for a small market such as Slovakia's stock market. This paper discusses the application of comparative methods to the non-standard Slovak capital market.

Keywords: valuation; intrinsic value; methods of valuation; comparative method (search for similar items in EconPapers)
JEL-codes: C52 E44 G12 (search for similar items in EconPapers)
Date: 2016
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DOI: 10.18267/j.aop.544

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