An Improved Valuation Model for Technology Companies
AbstractThis paper estimates some of the parameters of the Schwartz and Moon (2001)) model using cross-sectional data. Stochastic costs, future financing, capital expenditures and depreciation are taken into account. Some special conditions are also set: the speed of adjustment parameters are equal; the implied half-life of the sales growth process is linked to analyst forecasts; and the risk-adjustment parameter is inferred from the company’s observed stock price beta. The model is illustrated in the valuation of Google, Amazon, eBay, Facebook and Yahoo. The improved model is far superior to the Schwartz and Moon (2001) model. View Full-Text
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Doffou, A. An Improved Valuation Model for Technology Companies. Int. J. Financial Stud. 2015, 3, 162-176.
Doffou A. An Improved Valuation Model for Technology Companies. International Journal of Financial Studies. 2015; 3(2):162-176.Chicago/Turabian Style
Doffou, Ako. 2015. "An Improved Valuation Model for Technology Companies." Int. J. Financial Stud. 3, no. 2: 162-176.