Stock valuation models with a view to achieving optimal model in the banking industry of Iran

Subject Areas : Financial Knowledge of Securities Analysis

Zahra Taraghi Jah ¹ , Hashem Nikoomaram ²

1 - دانشجوی کارشناسی ارشد رشته مدیریت مالی دانشگاه آزاد اسلامی واحد علوم و تحقیقات تهران
2 - استادتمام دانشکده مدیریت دانشگاه آزاد اسلامی واحد علوم و تحقیقات تهران،

Received: 2014-09-12 Accepted : 2014-10-23 Published : 2015-12-22

Keywords: Valuation, Stock intrinsic value, Valuation stock models, Discounting cash flow,

Abstract :

Valuation is a knowledge which helps modeling all effective factors in the company's cash flow, while helping the share holders to determine stock intrinsic value, through discounting company's cash flow. One objective of a valuation system is to help students simulate changes in a firm’s financial strategies and discover how these changes affect a firm’s credit health or its value. It also simulates all company's financial affairs, through which the investors could calculate the relative reports on stock intrinsic value efficiency and regulate their transactions, as regards to the expected profit.Moreover, the Managers could also measure their decisions efficiency before the operations and render the highest return (value) to the stockholders.This research is a study over the efficiency of applying deferent approaches of valuation in obtaining the acceptable stock intrinsic value of private banks in Tehran securities exchange. Tentative instances show that discounted operating cash flow model has the most correlation coefficient with actual price of stock.