Practical application of econometric modelling to market approach method using Tesla Motors, Inc. as an example.
Buylov, Vitaly (2022)
Buylov, Vitaly
2022
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-202205179848
https://urn.fi/URN:NBN:fi:amk-202205179848
Tiivistelmä
The aim of this study is to some extent a reality check for one of the most commonly used contemporary equity valuation methods. Particular interest is the application of the multiple linear regression method to the market valuation approach. Tesla Motors Inc. is used as an example of a company under valuation.
The paper provides a brief overview of the market valuation approach as well as a detailed overview of the process of multilinear regression modelling including but not limited to the statistical inference after logarithmic transformation.
The rationale for choosing Tesla Motors Inc. lies behind its uniqueness which together with the combined econometric market valuation approach is expected to drive this method to its limitations.
As a result, the study shows that although this combined approach under particular conditions can yield some trustworthy results valuer should not entirely rely on that method only. Instead, it is recommended to use it in a combination with other valuation methods such as discounted cash flow approach.
The paper provides a brief overview of the market valuation approach as well as a detailed overview of the process of multilinear regression modelling including but not limited to the statistical inference after logarithmic transformation.
The rationale for choosing Tesla Motors Inc. lies behind its uniqueness which together with the combined econometric market valuation approach is expected to drive this method to its limitations.
As a result, the study shows that although this combined approach under particular conditions can yield some trustworthy results valuer should not entirely rely on that method only. Instead, it is recommended to use it in a combination with other valuation methods such as discounted cash flow approach.