A Study On The Determination Of The Value Multiplier In The Comparative Law Of Listed Companies

Business valuation has been developing in China since 90s of the last century, which started earlier in the western developed countries. Through continuous researches of scholars and appraisers in two aspects of theory and practice, valuation system has become more and more mature. In the developed countries in Europe and America, market approach is the most commonly used method of business valuation. However, due to the underdevelopment of market economy and lack of market transactions in China, there is little application of market approach to assess business value in practice. And the problem hasn’t been resolved yet. This paper focuses on the determination of value multiplier. Choosing different value multipliers will result in different valuation results, which is often the main reason that leads to inaccuracy of evaluation results. So how to determine the appropriate value multiplier is one of the technical problems.Firstly, this paper analyzes the applicability of different value multipliers, the criteria for selecting value multipliers in market approach and problems that should be paid attention to during enterprise value evaluation. With value multiplier as the research object, the paper tries to take a deep understanding of the basic meaning of value multiplier, analyze their driven and impact factors and compare their applicability and limitations.Secondly, this paper uses principal component factor analysis and regression analysis to extract a comprehensive factor based on value multiplier and establish a simple linear regression of the comprehensive factor and the equity value of enterprise, which is a new comprehensive value multiplier model. This paper aims to calculate the comprehensive multiplier, which makes up the defects caused by choosing single multiplier or modifying subjectively in the evaluation and gives an answer to the question that how to choose value multiplier appropriately.