Relative Valuation Approach for Valuing Equity in Malaysia
Brian S. Sutedjaa, Noor Azuddin Yakoba and Carl B. McGowan Jr.b, aGraduate School of Business, Universiti Kebangsaan Malaysia, Bangi, Selangor Darul Ehsan 436 00, Malaysia, bNorfolk State University, 601 Pembroke Avenue (410), Norfolk, VA 23507, USA, nok95.88@gmail.com; azuddin@ukm.my; cbmcgowan@nsu.edu
Abstract
This chapter examines the accuracy of the relative valuation approach for stocks in Malaysia using earnings, book value, cash flow, sales, and EBITDA as the value drivers. The highest valuation accuracy is provided by the price to cash flow ratio for the combination of industry and ROE. The accuracy of valuation multiples depends on the definition of comparable ...
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