Publication |
2018
Abstract
This paper investigates statistical significance of earnings stability in the within-company indirect valuation method. We empirically establish superiority of a within-company earnings multiple valuation technique for the relatively most stable companies.
Favorable empirical results are robust against different means of operationalization of the stability construct and valuation multiples. Results of this paper indicate that the indirect within-company price-to-earnings valuation yields the most precise and the most accurate value estimates.