Stock Prices and DCF valuation – Evidence from China

DOI

10.2991/aebmr.k.210917.061How to use a DOI?

Keywords

Stock Prices, DCF valuation

Abstract

The DCF model is a valuation model that we often use in our daily life. It is a common model for company valuation. Although the DCF model is the best choice of most companies’ valuation models, there are still many inaccuracies in this valuation compared with the actual value. To verify the accuracy of the DCF model, this paper bases it on the real free cash flow, comparing and analysing the DCF valuation and stock prices. We found a) the results of the DCF model are not the same as the actual stock price at the end of 2005; b) the DCF valuation results are significantly higher than the actual stock price; c) the degree of deviation is different from various industries. The deviation may be caused by the reform of non-tradable shares in 2005.

Copyright

© 2021, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Dongmei Chen
AU  - Xinru Ma
AU  - Runzhi Yan
PY  - 2021
DA  - 2021/09/18
TI  - Stock Prices and DCF valuation – Evidence from China
BT  - Proceedings of the 2021 International Conference on Financial Management and Economic Transition (FMET 2021)
PB  - Atlantis Press
SP  - 390
EP  - 397
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.210917.061
DO  - 10.2991/aebmr.k.210917.061
ID  - Chen2021
ER  -