Empirical Study On Time Effects Of The Value Of NYSE Listed Companies

With the finance develops constantly, modern finance produces lots of coretheories. Corporate value, which belongs to one of those core theories, is measured toweigh the return ability to corporate’s shareholders, creditors and stakeholders.Contemporary corporate life cycle theory connects the corporate value with the timechanges. The corporate is like an organic life body and it needs growing anddeveloping to make itself stronger and stronger. The mission of a corporate is tomaximize its value. Hence the day it was registered, the corporate longs for growingand developing. Like other life bodies, the corporate will have to experience differentlife cycles. The corporate life cycle discusses the whole procedure that the company atthe beginning emerges and develops from being small to big. When it matures itsvalue slowly lower and in the end it disappears gradually.This paper is mainly discussing about relevant contents of the corporate financefield. The specific ideas of this paper are: firstly, this paper uses panel data model tostudy corporate value time-varying characters and classifies325listed companies’data from year1996to2010in New York Stock Exchange to two samples: based ondifferent listed years or different lengths of listed cycles. Secondly, the paper usesthese two samples to do the empirical study to search for general rule of time effectsof corporate value. In the end, the paper does the empirical study on financial data oflisted corporates to search for which financial indicators could interpret corporatevalue time-varying characters.The empirical study shows that:Firstly, no matter whether eliminates influences of macroeconomic factors oruses different listed year’s samples or different lengths of listed cycle’s samples.Listed corporate value with time varying in NYSE shows a typical U-shaped curve.Compared with the outcome from314listed companies in Shanghai Stock Exchange,the outcome in this paper is basically the same but shows a little bit difference. The feature of the U-shaped curve of NYSE companies is less obvious than that of theU-shaped curve of companies in Shanghai Stock Exchange. The reason may beinterpreted as follows: the motivate for Chinese companies to decorate financialstatements before going public is stronger than that for NYSE companies. It makesthe value of Chinese companies higher than it should be. When Chinese companies gopublic successfully the real indicators appear and make the corporate value goes down.In the end, the corporate value gradually rises because the company raises low-costmoney which helps the company develops well.Secondly, no matter whether use different listed year’s samples or differentlengths of listed cycle’s samples. The outcome after eliminating macroeconomicfactors is much better than that without eliminating macroeconomic factors. It showsthat the corporate value is influenced by macroeconomic factors. Based on theempirical study of different lengths of listed cycle’s samples, the longer listedcompanies go public, the more significant the regression outcome is. It tells us listedcompanies’ value does shows obvious U-shaped curve when the time varies longer.Thirdly, the empirical study on financial data of American listed companiesshows that asset turnover rate, total return index of net dividend, WACC of stock costand WACC of debt cost together interpret the reason why listed corporate value withtime varying shows a typical U-shaped curve.