Valuation of Unlisted Direct Investment Equity
International Monetary Fund, Nov 1, 2009 - Business & Economics - 72 pages
This paper analyzes the seven valuation methods for unlisted direct investment equity included in the recently adopted IMF Balance of Payments and International Investment Position Manual, Sixth Edition (BPM6). Based on publicly available Danish data, we test the three methods that are generally applicable and find that the choice of valuation method and estimation technique can have a highly significant impact on the international investment position, pointing to the need for further harmonization. The results show that the price-to-book value method generates more robust market value estimates than the price-to-earnings method. This finding suggests that the valuation basis for the forthcoming Coordinated Direct Investment Survey - own funds at book value -will provide useful information for compiling the international investment position.
What people are saying - Write a review
We haven't found any reviews in the usual places.
II Valuation of Equity
III Study Design and Data
IV Empirical Modeling of Market Value Estimates
V Application of Models to the Danish International Investment Position
VI Conclusion and Recommendations
Other editions - View all
absolute valuation models accounting data adjusted R2 Arithmetic mean assets assumption based on data bilateral asymmetries book value BPM6 paragraph Bureau van Dijk's Calculations based central tendency measures coefficient of determination company-specific control premium correlation Danish IIP data from Bureau dataset Denmark Dijk's ODIN Database direct investment enterprises direct investment equity dummy variable eamings earnings measures EBIT equity valuation estimation techniques factor ﬂow future earnings IFRS IIP compilers illiquidity discounts included independent variables indicator liquidity variable listed and unlisted macroeconomic statistics market price market value approximations market value estimates marketability discount models on market multi-factor models multicollinearity negative equity negative positions Nordic countries number of observations OFBV P/B ratios P/E models parameter estimates peer group regression approach regression models relative valuation models robust scale effects statistical manuals stock market index Table trading volume unlisted companies unlisted direct investment unlisted equity valuation multiples valuation of unlisted value of equity