The Importance of the Country’S Gdp in the Evaluation of Companies Using Multiples on the European Stock Market

• Oleg Nikolayevich SALMANOV ^[1] ; Natalia Vladimirovna BABINA ^[1] ; Svetlana Viktorovna BASHIROVA ^[1] ; Marina Viktorovna SAMOSHKINA ^[1] ; Ruslan Rafailovich BASHIROV ^[1]
  1. [1] Finance and Technology Academy, Korolev
• Localización: Estudios Economicos Regionales y Sectoriales : EERS: Regional and sectoral economic studies : RSES, ISSN 1578-4460, Vol. 16, Nº. 1, 2016, págs. 33-44
• Idioma: inglés
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• Resumen

  • The article provides an overview of contemporary empirical studies of the relationship between country characteristics and valuation multiples. It describes the existing approaches to establishing the accuracy of multiples, as well as the comparison of the empirical evaluations obtained by different researchers. This article is intended to analyze the influence of the estimated multiples on the accuracy of differences in the country characteristics. The article examines the impact of the GDP growth on the accuracy of determining the “price/earnings” multiples for the comparative valuation of companies on the European markets. An econometric study presented in this paper allows making a conclusion about the need to find justification for the differences in the multiples and mitigation of the differences. It also allows assessing the dependence of the “price/earnings” multiple on the GDP growth rate by European countries. The article explains the accounting of GDP growth as one of the methods of mitigating the differences in the variables and P/E multiples in different countries.