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Transparency in the German Real Estate Market a Comparison with the US and the UK

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46.PDF 1 Title of Paper: Analogical Stock-Market valuation of construction and real estate companies Authors: Bartual, Concepción Caballer, Vicente Moya, Ismael Institutional Affiliations: Centro de Ingeniería Económica Universidad Politécnica de Valencia Paper presented at the 8th European Real Estate Society Conference- ERES Alicante, 2001, in Alicante, 27-29, June, 2001 Abstract The aim of this work is to obtain explanatory equations for the stock-market value of construction and real estate companies, using the economic-financial information supplied by the same. Equations of fundamental valuation of construction and real estate companies will be calculated by means of combination of factor analysis of principal components and multiple regression, synthesizing the available information in the market and avoiding the frequent problem of multicollinearity. The contribution of this methodology to companies valuation increases on seeing the difficulties and the lack of precision when applying traditional methods. In this way, besides conventional methods, another additional criterion of valuation of companies is used, being useful in stock-market operations, in processes of concentration or for financial administration of these companies. KEY WORDS: valuation of companies, analogical stock-market valuation, construction and real estate companies, stock market analysis 1. Introduction The aim of this work is to obtain an explanatory equation to the stock-market value of a company from the construction sector, using economic and financial information supplied by the company. We will use this equation to calculate the analogical stock market value of others companies that are not quoted in the Stock Exchange. According to the current financial theory the aim that the companies have to pursue is the creation of shareholder value (Rappaport, 1998). This introduces the need of using useful models in the estimation calculus o

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