The Research on the Valuation of Chinese Internet Companies------Based On DCF-BS Method

SHI, BOHAN (2017) The Research on the Valuation of Chinese Internet Companies------Based On DCF-BS Method. [Dissertation (University of Nottingham only)]

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Abstract

The concept of "Internet plus" was first mentioned in NPC &CPPCC (National People Congress and Chinese People Political Consultative Conference) in 2015. With the advent of Internet Plus era, the development of Internet industry has been accelerating. At the same time, the issue of how to accurately assess the value of Internet enterprises is widely valued.

In 1963, Modigliani and Miller established a cash flow discount model. This model is rapidly becoming the core of modern enterprise value assessment due to its practicality and universality. However, the high uncertainty of future earnings of Internet enterprises, light assets, and reliance on customer traffic make traditional enterprises' value assessment methods no longer fully applicable to Internet enterprises. Therefore, determined the scientific and reasonable value assessment method system, which might facilitate the continuous development of the Internet industry, and help investors make better investment decisions is very important and urgent for Internet enterprises.

The academic community now have different opinions on the determination of the value evaluation method of Internet enterprises. Some scholars believe that the basic position of cash flow discount method in the valuation of Internet enterprises cannot be changed. Some scholars point out that the basic position of cash flow discount method has changed. In some cases, it not only underestimates the future profit opportunities of Internet companies, but also fails. The author believes that the latter is more reasonable. Therefore, this dissertation proposes to combine the cash flow discount method with the real option method to evaluate the value of the enterprise. This paper makes empirical analysis of seven Internet companies, contrasts with the results of a single cash flow discount method, and then find one method which closer to the actual result. So as to determine a scientific and effective method of Internet enterprise value evaluation. Finally, the author gives the future researchers some suggestions about internet company valuation methods.

Item Type: Dissertation (University of Nottingham only)
Depositing User: Shi, Bohan
Date Deposited: 09 Apr 2018 15:15
Last Modified: 10 Apr 2018 15:05
URI: http://eprints.nottingham.ac.uk/id/eprint/46212

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