Theimproved Relative Valuation Method Based On The F-O Model

As the global financial increasing degree of internationalization and liberalization, as the highlight of the development of the banking industry has been the concern of. Along with our countrybanking industry comprehensive joint-stock reform, the number of listed commercial banks is also showing a trend of the increasing. In the face of commercial banks listed, inter industry and inter industry between the acquisition, merger and reorganization, and subsequent investorsinjection, how to reasonably share price of listed banks has become a must problem. The realityoften is not optimistic, overestimated or underestimated the situation has occurred. Consider to solve the value assessment of the company’s stock market often and reality reflected in thestock price, the intrinsic value of the enterprise value which affects the generation and evaluation, to produce a problem deviation. In this paper, locking method and F-O theory model of the two respectively in the traditional evaluation model and modern assessment model is more respected evaluation method for further study on the relative valuation.This paper believes that, in the face of the listing Corporation’s evaluation using can reflect themarket situation is the index is necessary, but there are many defects in the relative valuation method, such as factor analysis is too single, accounting policy influence, can not fully reflect thecompany’s intrinsic value. The theory of F-O model in this model by the Feltham and Ohlsonbased on residual value method are derived using modern assessment of improvement of therelative valuation method, F-O theory model that will exist for current and past accounting information and listing Corporation inevitable dividend information into value assessment, F-O theory model has not restricted by the accounting method choice the other good characteristics,these characteristics exactly and form a complementary to the relative valuation method, so that the relative valuation method of valuation is more scientific,more accurate valuation.In this paper, through the association of F-O is described and the theoretical model and the relative valuation of the two similarities, the two combine, constructs a new evaluation model. And the application of this evaluation model to simulate the valuation of the16listed banks in China’s current, numerical and traditional model of stock price and then will use the improvedafter the evaluation mode of assessment of out valuation compared. The empirical analysisresults show, by numerical and real error after the improved F-O theory model of the relative valuation method evaluation model to evaluate the value of low rate to+1.75%, an increase of about82.12%than the traditional evaluation model to assess the accuracy, the improved after the new evaluation model construction for listed banks corporate value explanation ability is better.