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Relative Performance of Valuation Using Multiples. Empirical Evidence on Bucharest Stock Exchange

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  • Dragos Ioan Mînjina

    (Academia de Studii Economice / Facultatea de Finante, Asigurari, Banci si Burse de Valori)

Abstract

This paper examines the valuation performances of seven multiples on a sample of BSE-listed firms. When industry membership is used as the selection method for comparable firms, the P/CF multiple leads to the best valuation performance. P/E, P/B, P/CF and P/TA multiples assure the highest accuracies when ROE is used as the selection method for comparable firms. In the case of both selection methods of comparables, the P/S multiple leads to the least accurate valuation. In this study, accuracy levels of multiple valuations are generally lower than those obtained using the same methods on more developed capital markets.

Suggested Citation

  • Dragos Ioan Mînjina, 2009. "Relative Performance of Valuation Using Multiples. Empirical Evidence on Bucharest Stock Exchange," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 1(1), pages 035-053, December.
    • Handle: RePEc:rfb:journl:v:01:y:2009:i:1:p:035-053
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    Keywords

    Selection method; capital markets;

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