Using Bottom-up Method to Measure the Intrinsic Value of Stocks

摘要：

This paper uses a bottom-up approach based on forecasted earnings and time-varying interest rates to measure the intrinsic value of stocks.In this study,the Edwards-Bell-Ohlson (EBO) valuation method which is a discounted residual income model is used to derive a more precise estimate V/P of the intrinsic value than B/P ratio.The model provides a framework for analyzing the relation between accounting numbers and firm value.Several recent studies evaluate the models ability to explain stock prices,but these studies dont come down to the predictive power of the model for cross-sectional stock returns.Through the testing,it can be found that the short-term prediction results for V/P are slightly weaker than the results for B/P but V/P is much better at explaining cross-sectional prices than B/P.V/P is also a better predictor of long-term returns.

关键词： Intrinsic value Bottom-up approach Residual income model Book to price Value to price

作者: LI Hua

作者单位: School of Economy & Law,University of Science & Technology Liaoning,P.R.China,114051

会议类型: 国际会议

会议名称: 2007 International Conference on Management Science and Engineering(2007管理科学与工程国际学术会议)

会议地点: 河南焦作

会议语种:英文

页码: 1973-1977

在线出版日期: 2007-08-20（万方平台首次上网日期，不代表论文的发表时间）