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International Journal of Academic Research in Business and Social Sciences

Open Access Journal

ISSN: 2222-6990

Markov Chains Used to Determine the Model of Stock Value and Compared with Other New Models of Stock Value (P/E Model and Ohlson Model)

Abbasali Pouraghajan, Zeinab Javadiyan Kotenaie, Faramarz Niazi, Milad Emamgholipour

Open access

The aim of this study a comparison between the three models for the valuation of stocks in
Tehran Stock Exchange. These three names PE, Olson or residual income and a Markov chain
(Markov) are. Researchers in their study were to calculate the valuation of shares in the first
two terms and then calculate the value of the enamel Markov chain to achieve a comparative
mode. Result of research shows that almost in all cases, there is no significant difference
between explanatory power of these models in determining shares value and investments in
Tehran exchange market can for assessment of shares uses from these 3 models, but in most
cases residual income assessment model by considering less standard error of regression can
say, partly is better model in determining the company's value which maybe the main reason
be have high explanatory power of two dependent profit variable overall, and book value of
share holder's salary by using the overall accounting relation in comparison with two other
models.

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