Value Multiples Of Law And Its Applications In The Analysis Of The Value Of Securities

A new idea was provided for security analysis with the appearance of the Feltham - Ohlson Valuation Model. The purpose of this paper is to found a convenient and effective new one based on the Feltham - Ohlson Valuation Model. In the first chapter of this paper, we state the general principles on security analysis and discuss some problems of those traditional valuation models. In the second chapter, the concept of value multiple is introduced in details and a new valuation model is given at the end of this chapter. An important conclusion is drown through data analysis in American capital market in the chapter three: there is a strong relativity between the value multiple and the stock price. In the next chapter, weanalyze those factors that they can weaken the effect of value multiple when we use itto judge the intrinsic value of securities in our country and countermeasures ^against those factors. Moreover, we have got some empirical evidence that show value multiple can make effect when we invest on our security market. At last, we point out some disadvantages about value-multiple model and the direction to the further research.