Equity- and entity-based multiples in emerging markets : evidence from the JSE Securities Exchange

dc.contributor.authorNel, W. S.
dc.contributor.authorBruwer, B. W.
dc.contributor.authorLe Roux, N. J.
dc.identifier.citationNel, W.S., Bruwer, B.W. & Le Roux, N.J. 2013. Equity- and entity-based multiples in emerging markets: Evidence from the JSE Securities Exchange. The Journal of Applied Business Research, 29(3): 829-852.en_ZA
dc.identifier.issn0892-7626 (print)
dc.identifier.issn2157-8834 (online)
dc.descriptionPublication of this article was funded by the Stellenbosch University Open Access Fund.en_ZA
dc.descriptionThe original publication is available at
dc.description.abstractAnalysts typically distinguish between equity- and entity-based approaches when employing the free cash flow model to perform equity valuations. However, when multiples are used to perform equity valuations, analysts often neglect to distinguish between equity- and entity-based approaches. In addition, limited empirical evidence exists on the relative valuation performance of equity- and entity-based multiples in developed capital markets and the emerging markets literature is entirely silent in this regard. In this paper the valuation accuracy of equity-based multiples is compared to that of entity-based multiples in valuing the equity of South African companies listed on the JSE Securities Exchange for the period 2001-2010. The research results reveal that equity-based multiples significantly outperform entity-based multiples, indicating a potential increase in valuation accuracy of as much as 15.37%.en_ZA
dc.description.sponsorshipStellenbosch Universityen_ZA
dc.format.extentp. 829-852 : ill.
dc.publisherClute Instituteen_ZA
dc.subjectEquity method (Accounting) -- South Africaen_ZA
dc.subjectBusiness enterprises -- Valuation -- South Africaen_ZA
dc.subjectEquity-based multiplesen_ZA
dc.subjectEntity-based multiplesen_ZA
dc.subjectValuation accuracyen_ZA
dc.subjectJSE Securities Exchange South Africaen_ZA
dc.titleEquity- and entity-based multiples in emerging markets : evidence from the JSE Securities Exchangeen_ZA
dc.description.versionPublishers' versionen_ZA
dc.rights.holderAuthor retain copyrighten_ZA

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