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Modeling the Equilibrium Price of the Companies Listed in the Prague Stock Exchange

Florin Aliu, Adriana Knápková, Hoang Khang Tran and Bashkim Nurboja
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Florin Aliu: University for Business and Technology, Lagjja Kalabria, 10000 Prishtine, Kosovo
Adriana Knápková: Department of Finance and Accounting, Faculty of Management and Economics, Tomas Bata University in Zlín, nám. T. G. Masaryka 5555, 760 01 Zlín, Czech Republic
Hoang Khang Tran: Department of Finance and Accounting, Faculty of Management and Economics, Tomas Bata University in Zlín, nám. T. G. Masaryka 5555, 760 01 Zlín, Czech Republic

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 2020, vol. 68, issue 4, 731-739

Abstract: Valuation provides proper evidence on the financial situation of the firms. Incorrect valuation delivers wrong signals for the market participants and stands on the concepts of markets with information asymmetry. The study measures the estimated intrinsic value of the selected companies listed in the Prague Stock Exchange. Moreover, the results of the work observe influencing factors that deviate stock prices of the companies listed in the Prague Stock Exchange (PSE) from their estimated intrinsic value. Valuation techniques and Monte Carlo Simulation were employed to detain the estimated intrinsic of the selected companies from the Prague Stock Exchange. The estimated results indicate that Czech listed companies deviate from the intrinsic value in the range of 58% while international companies in the range of 301%. However, the average deviation within market prices and intrinsic value of the companies listed in the PSE was 179%.

Keywords: valuation; stock prices; equilibrium price; fundamental value (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:mup:actaun:actaun_2020068040731

DOI: 10.11118/actaun202068040731

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