Equity valuation: The effect of market share dynamics on the value of multiple product lines

Srdjan Stojanovic

Journal of Risk Management in Financial Institutions, 2009, vol. 2, issue 3, 250-258

Abstract: This paper discusses methodological aspects of equity valuation (stock pricing) in the context of continuous-time finance. The special emphasis of this study is to provide a framework and explicit formulas for the balance-sheet itemisation of the product line contributions to the welfare of the firm, and, in particular, the effect of product market share dynamics on the value of the product line, and on the value of the whole firm. The results were derived in the context of the general analytic theory of pricing and hedging of financial contracts in diffusive incomplete markets, and its applications in quantitative equity, both developed by the author in a series of previous works.

Keywords: quantitative equity; market share dynamics; product line dividend; financial engineering; PDE methods; special functions; accounting; marketing (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:aza:rmfi00:y:2009:v:2:i:3:p:250-258

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