The Application Of Improved Market Method On Valuation Of China's A Stock Market Medical Listed Companies

With the long-term development of business valuation theory, setsof traditional valuation methodologies and models have being welldeveloped. In western industrial countries, valuation analysts arefrequently using these methodologies in equity investment and M&A areas.With regard to recent methodologies, it mainly includes Income Method(such as Discounted Cash Flow method), Market Method, Option Method andCost Method. During valuation practice, security analysts adopt theMarket Method and Income Method most often according to thecharacteristics of target enterprises. However, Market Method is rarelyused in Mainland China.In this paper, the author investigates the difficulties in businessvaluation practice in Mainland China. Based on Efficient Capital MarketTheory, the author also have an empirical analyze on the medical listedcompanies of A stock market before the Equity Distribution Reform, andcreates a reasonable valuation model as the reference for equityinvestors, investment intermediaries and medical enterprise managements.It can also be used as a template when business valuation professionalsvalue the public listed companies in other industries.This paper is divided into five chapters.In Chapter 1, it is a brief introduction on the research background,key concepts, research path and methods.In Chapter 2, the author makes an overall comprehensive analysis ofand comments on the Efficient Capital Markets Theory and empirical resultof the efficiency of A stock market through summarization of a great dealof relevant western literature and relevant theories, and reach aconclusion of A stock market being a weak-efficient market. Then, theauthor has a summarization on business valuation theory and recent MarketMethod valuation models. Finally, the author put a discussion of theconnection between the application of Market Method and Efficient CapitalMarket Theory.In Chapter 3, it is concerning the improved Market Method on thevaluation of A stock market listed medical enterprises at first. In thesecond place, the author analyses the A stock market's equitydistribution problem's impact on listed company valuation. Finally,this paper set out the way of improving Market Method.In Chapter 4, author implements the improved method statisticallyand come to a better valuation result. Empirical result shows that theimproved Market Method optimizes the traditional Market Method to someextent in accuracy. In chapter 5, also the last part, the paper putsforward conclusions and prospects.Facing the theoretical and practical problems in Market Methodbusiness valuation, the author improves the method based on multiplestatistical techniques relatively. However, as in the corporate financeand finance area, business valuation is sure to come up against otherproblem at the same time. So, it needs a great deal of further theoreticaland empirical study in the future.