The Determinants of the Value of Unlisted Shares: Opinions of Professional Valuers in Canada

Kantor, Jeffrey; Pike, Richard

doi:10.1080/00014788.1987.9729789

Cited by 6 publications

(5 citation statements)

References 9 publications

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“…Firstly, while Kantor and Pike's (1987) survey found general support for the view that future earnings prospects is the main determinant of share valuations, in our present study it is clear that historic accounting data are 'good' predictors of the value placed on shares by expert valuers. One explanation for the apparent discrepancy between valuers' beliefs and practices is that the difficulties in forecasting future earnings, allied to the need to justify valuation judgement to others (e.g.…”

Section: Summary and Implicationssupporting

confidence: 53%

“…Valuation theory prescribes exassociated level of market risk as the major determinants of share values. We suggest that the Where: Log(SHAREVAL) = a,+ a, * Log(EARN1NGS) + a2 * Log(EARNGR0W) + a3* Log(EARNVAR) + a4 * Log(BO0KVAL) + a, * Log(LEVERAGE) + a6 * Log(LIQUID1TY) + bzV2 + b3V3 + b4V4 + bSV, + b6V6 + b,V, pected future earnings (or cash flows) and its 2This literature is discussed in Kantor and Pike (1987) and is not therefore repeated here. …”

Section: Variable Selectionmentioning

confidence: 99%

“…The purpose of the study reported in this paper is to analyse the actual unlisted share valuations conducted within seven major accounting firms and to estimate a model based on the underlying accounting data, to explain variations in share valuations arrived at by these firms. Kantor and Pike (1987) reported findings based on a survey of 267 Canadian accountants regularly engaged in valuing unlisted shares. One observation was that valuers regard future expected earnings as the most important information variable in the valuation of unlisted shares.…”

Section: Introductionmentioning

confidence: 99%

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The Role of Accounting Information in Valuing Unlisted Shares

Pike¹,

Sharp²,

Kantor³

1988

Accounting and Business Research

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Little research has been conducted on how professional accountants value unlisted shares. The study reported in this paper analyses the accounting and other data drawn from 185 actual unlisted share valuation reports within seven major Canadian accounting firms to estimate a model of and to explain variations in the values placed on unlisted shares.The findings suggest that valuation of unlisted shares can be explained largely in terms of historic accounting data, the main sources being earnings, earnings stability and asset book value. A high degree of consensus on the importance of variables was found across accounting firms. The implications of these findings are discussed.

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Section: Summary and Implicationssupporting

confidence: 53%

Section: Variable Selectionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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The Role of Accounting Information in Valuing Unlisted Shares

Pike¹,

Sharp²,

Kantor³

1988

Accounting and Business Research

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“…Similarly, unlisted firms report high quality of earnings, when they are least opportunistic and report low quality of earnings when there is no demand for higher quality of earnings. Kentor and Pike (1987b) find that historical and potential earnings constitute the most important variables in business valuations of unlisted companies. They play a vital role in mergers and acquisitions where three out of four acquired firms are unlisted firms.…”

Section: Review Of Literature and Hypothesis Developmentmentioning

confidence: 97%

Applying Benford’s Law to Examine the Quality of Reported Income Numbers of Unlisted Firms

Kuntluru

Shette

Achalapathi

2015

IJEF

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The present study makes an attempt to examine the quality of reported income numbers of unlisted firms in India. The Benford"s Law is applied to examine the digital occurrence of reported income numbers of unlisted firms. The analysis is based on 43,996 reported annual income numbers of 22,147 sample firms during the financial years from 2000-01 to 2011-12. Further, the results are analyzed under four different scenarios viz., ownership, size, age and nature of industry. The empirical results show that the observed proportionate occurrence of zero is significantly less than the expected proportionate occurrence. These results are contrary to the findings of the related studies of listed companies. The results indicate lower quality of reported income numbers of unlisted firms. Based on the scenario analysis, the empirical results indicate that the proportionate occurrence of second single digits of state-owned unlisted firms confirm the Benford"s Law. The present study contributes to the literature by examining the quality of reported income numbers of unlisted firms using the Benford"s Law.

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“…In the absence of listed share prices for privately owned companies, an alternative approach would be to compute the market value for shares of unlisted firms. Several methods have been proposed in the literature for determining the value of shares of privately held firms (see, for instance, Kantor & Pike, 1987a, 1987b. Besides, researchers may also combine the ESM with primary data collection methods such as surveys and interviews with managers in order to understand whether and/or how the timing of major corporate announcements is predetermined.…”

Section: Use Of the Esm In Prior Marketing Literaturementioning

confidence: 99%