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Direct Comparison Method In Valuating A Non-Listed Romanian Company

Author

Listed:
  • Ioan BIRCEA

    (Universitatea "Petru Maior" din Tirgu-Mures, Str. Nicolae Iorga nr.1, Tirgu-Mures, Mures, 540088, Romania)

Abstract

As with any transaction conducted on a market the economic value of a property is assessed by comparing it with the price of some identical or similar goods, recently traded on this market or any other market. This rule is also applied in the case of shares or social shares. Direct comparison method involves determining the value of the shares or the social shares of a company by comparing them with shares traded on the market of some similar and relevant companies. A prudent buyer not offers a higher price than the price of a similar traded asset.

Suggested Citation

  • Ioan BIRCEA, 2013. "Direct Comparison Method In Valuating A Non-Listed Romanian Company," STUDIA UNIVERSITATIS PETRU MAIOR SERIES OECONOMICA, Petru Maior University, Faculty of Economics Law and Administrative Sciences, vol. 1, pages 45-65, December.
    • Handle: RePEc:pmu:oecono:v:1/2013:y:2013:p:45-65
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    File URL: http://www.upm.ro/facultati_departamente/ea/RePEc/oeconomica/2013/oeconomica1301_05.pdf
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    More about this item

    Keywords

    Direct comparison; Equity; Multiplier; Risk.;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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