Comparables Pricing ∗
نویسندگان
چکیده
We explore the role of comparables in price formation. Using data on corporate loans, we exploit the lag between loans’ closing dates and their inclusion in a widely-used comparables database to identify the causal effect of past transactions on new transaction pricing. We find that comparables pricing is an important determinant of individual loan spreads, but a failure to account for the overlap in information across loans leads to pricing mistakes. A comparable’s influence grows with repeated use through its impact on intervening transactions. Moreover, market conditions prevailing at the time a comparable was priced also unduly influence subsequent loans. ∗Correspondence: Murfin: [email protected], (203)436-0666. Pratt: [email protected], (801)422-1222. We thank Nick Barberis, Sudheer Chava, David Hirshleifer, Geoffrey Tate, Heather Tookes, participants at the Miami Behavioral Finance Conference, Olin Corporate Finance Conference, Red Rock Finance Conference, and Colorado Finance Summit and seminar participants at Brigham Young University, University of Utah and Yale University for helpful comments.
منابع مشابه
Selecting Comparables for the Valuation of European Firms
This paper investigates which comparables selection method generates the most precise forecasts when valuing European companies with the enterprise value to EBIT multiple. We also consider the USA as a reference point. It turns out that selecting comparable companies with similar return on assets clearly outperforms selections according to industry membership or total assets. Moreover, we inves...
متن کاملBilingual Lexicon Extraction from Comparable Corpora by Combining Contextual Representations (Extraction de lexiques bilingues à partir de corpus comparables par combinaison de représentations contextuelles) [in French]
RÉSUMÉ La caractérisation du contexte des mots constitue le cœur de la plupart des méthodes d’extraction de lexiques bilingues à partir de corpus comparables. Dans cet article, nous revisitons dans un premier temps les deux principales stratégies de représentation contextuelle, à savoir celle par fenêtre ou sac de mots et celle par relations de dépendances syntaxiques. Dans un second temps, nou...
متن کاملAn Overview of Valuation Practices and the Development of a Canadian Code for the Valuation of Mineral Properties
The notion of “value” has always been a subjective and contentious issue. Indeed, Value is in the eye of the beholder. There are varied methods and practices for valuing property, as there are industries in which they are applied. For example, there are “replacement value”, “insurance value, “salvage value”, “appraised value”, “book value” and “fair market value”, to name a few, although in the...
متن کامل