In the valuation of uncertain prospects, a difference is often observed between selling and buying perspectives. This paper distinguishes between risk (known probabilities) and ambiguity (unknown probabilities) in decisions under uncertainty and shows that the valuation disparity increases under ambiguity compared to risk. It is found that both the comparative versus noncomparative evaluation o...

This paper investigates how defined benefit pensions deficits/surpluses influence UK company valuation under the fair value accounting regime that became mandatory in 2006 with the introduction of IAS 19. Using a sample of FTSE firms from 2006 to 2012 we find that reported pension deficits significantly reduce the market value of a company, with the market valuation of deficits being larger tha...

based on valuation model of residual earnings, we cannot use earnings and losses of balance sheet items recorded in fair value for valuation purposes, for the balance sheet provides a perfect estimate of such items’ value. the purpose of this study is to examine whether net financial expenses are related to the market price of stocks in iran, because after initial recording of financial debts, ...

Valuation is the process of estimating price. The methods used to determine value attempt to model the thought processes of the market and thus estimate price by reference to observed historic data. This can be done using either an explicit model, that models the worth calculation of the most likely bidder, or an implicit model, that that uses historic data suitably adjusted as a short cut to d...

In this chapter, we describe stochastic discounting and valuation of random cash flows in a discrete time setting. We therefore introduce a consistent multiperiod pricing framework. This consistent multiperiod pricing framework is either based on state price deflators or on equivalent martingale measures. The connection between these two pricing concepts is then described by the market price of...

The correct estimation of the real estate value facilitates decision making in various sectors, such as public administration or the real estate market. In this paper we demonstrate a method to manage territory scores and property valuation estimations as Linked Data with the help of the proDataMarket technical framework. The demo illustrates how the proDataMarket technical framework can be use...

In this chapter, we describe stochastic discounting and valuation of random cash flows in a discrete time setting. We therefore introduce a consistent multiperiod pricing framework. This consistent multiperiod pricing framework is either based on state price deflators or on equivalent martingale measures. The connection between these two pricing concepts is then described by the market price of...

Option valuation has been a challenging issue of financial engineering and optimization for a long time. The increasing complexity of market conditions requires utilization of advanced models that, commonly, do not lead to closed-form solutions. Development of novel numerical procedures, which prove to be efficient within various option valuation problems, is therefore worthwhile. Notwithstan...

We address the problem of pricing contingent claims written on electricity. The special feature of this paper is to consider contract pricing within a market for power producing plants. Calculating equilibrium prices for this market, we obtain a valuation for electricity contingent claims which is fair in the sense that arbitrage is excluded for capacity and claim trading.

To consider the psychological factors that impact market valuation, a model is formulated for investment behaviour of traders whose decisions are influenced by their trusted peers’ behaviour. The model is implemented and several different ‘‘trust networks’’ are tested. Simulation results demonstrate that real life trust networks can significantly delay the stabilisation of a market. © 2009 Else...