IDEAS home Printed from https://ideas.repec.org/a/pal/jorsoc/v62y2011i12p2097-2106.html
   My bibliography  Save this article

Valuing Internet companies: a DEA-based Multiple Valuation Approach

Author

Listed:
  • C-TB Ho

    (National Chung Hsing University, Taichung, Taiwan)

  • C-K Liao

    (National Chung Hsing University, Taichung, Taiwan)

  • H-T Kim

    (Nottingham University, Nottingham, UK)

Abstract

The Internet industry has created a great deal of marvels over the past decade. Assessing Internet companies’ values provides an alternative tool to help make better investment decisions. This paper presents a hybrid of both DEA and multiple valuation methods to valuate Internet companies. Four tailored valuation methods were proposed and a sample of 52 firms was tested based on Price-to-Gross Margin ratio. With the focus on the estimation direction (overvalued/undervalued), verified with the real prices, an accuracy rate of approximately 70% on average has been obtained from these four methods. The proposed methods allow investors to have a more accurate estimation of the subject company's current and future stock prices. This implies that the research results could help investors when they are making long-term or short-term investments.

Suggested Citation

  • C-TB Ho & C-K Liao & H-T Kim, 2011. "Valuing Internet companies: a DEA-based Multiple Valuation Approach," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(12), pages 2097-2106, December.
    • Handle: RePEc:pal:jorsoc:v:62:y:2011:i:12:p:2097-2106
    as

    Download full text from publisher

    File URL: http://www.palgrave-journals.com/jors/journal/v62/n12/pdf/jors2010191a.pdf
    File Function: Link to full text PDF
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: http://www.palgrave-journals.com/jors/journal/v62/n12/full/jors2010191a.html
    File Function: Link to full text HTML
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jorsoc:v:62:y:2011:i:12:p:2097-2106. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.