The reports published by independent parties are often used to provide an estimation of brands due\ud
to the lack of literature and best practices regarding which brand valuation method is more value\ud
relevant and reliable than another. Over the last several years, brand valuation debate is growing in\ud
importance because of the need to provide a value of intangibles for different purposes. The purpose\ud
of this study is two-fold. First, we aim to understand whether brand valuation related to listed\ud
companies provided by three independent agencies is value relevant and therefore whether these\ud
brand valuations are taken into consideration by investors in their decision-making process. Second,\ud
we assess which of the three methods reflects the stockmarkets in a better way. We analyse a sample\ud
of 71 brands valuated by Interbrand, Brand Finance and BrandZ from 2013 to 2015. The results show\ud
that brand valuation provided by the independent agencies is value relevant; in addition, they reveal\ud
that the Brand Finance method, based on the royalty relief approach, is more value relevant than the\ud
others. This study contributes to the extant literature on value relevance by providing evidence on\ud
the impact of stock prices of brand agencies’ valuation
The scope of this is paper is to provide new empirical evidence on the value relevance of employee stock options (ESOs) in Europe. We show, empirically, that the market participants when pricing a firm's equity place approximately the same valuation weights on the ESOdeferred compensation expense (the so called ''ESO asset'') and the compensation option liability (the so called ''ESO liability''). Our empirical findings support the theoretical work of Ohlson and Penman who suggest that the deferred compensation expense be treated as a contra-liability. The second contribution of our work rests on the nature of the ESO expense. We show that the distinction between persistent and non-persistent ESO expenses is of critical importance for the market participants. Accordingly, an improved accounting disclosure should assist the investors in assessing the long-term goals of the ESO plans at the firm level.
Market multiples are more often used than studied. Equity analysts, investment bankers and other practitioners widely use market multiples to estimate the value of companies. Nevertheless, literature about multiples is not as rich as the wide use of these valuation tools would suggest. This paper, focusing on European listed companies, investigates how multiples can be used in the valuation of cyclical companies, a much less investigated research topic. We test the accuracy of multiples to understand whether their performance in valuing cyclical companies is better, worse or equal to the performance found in prior studies, where both cyclical and non cyclical companies are analyzed without distinguishing between them. We also attempt to verify whether the way in which multiples are calculated significantly affects the accuracy of estimation. Our aim is to develop a valuation approach consistent with valuation theory and helpful in everyday practice.
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