The marketability discount in Spanish valuation multiples: investors’ perception in listed companies versus private transactions
The aim of this paper is to assess the fair marketability discount (MD) in the Spanish market for valuation multiples comparing public versus private transactions. The study finds that to obtain MD it is necessary previously to control by a battery of factors that affects ratios’ prices such as indu...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Vilnius Gediminas Technical University
2019-02-01
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| Series: | Journal of Business Economics and Management |
| Subjects: | |
| Online Access: | https://journals.vgtu.lt/index.php/JBEM/article/view/8101 |
| _version_ | 1819291184386801664 |
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| author | Ángel Rodríguez López Gracia Rubio Martín |
| author_facet | Ángel Rodríguez López Gracia Rubio Martín |
| author_sort | Ángel Rodríguez López |
| collection | DOAJ |
| description | The aim of this paper is to assess the fair marketability discount (MD) in the Spanish market for valuation multiples comparing public versus private transactions. The study finds that to obtain MD it is necessary previously to control by a battery of factors that affects ratios’ prices such as industry, firm size, profitability, risk, year and also other characteristics about the buyer. The interactions of MD with each variable showed different investors’ perceptions about non marketability enterprises explaining MD. The valuation methodology applied in the research was a cross section of 824 public and private acquisitions in the Spanish market from the period 2006−2017. This work represents important evidence, in a more integrated vision than previous literature, for analysts and regulators stressing the necessity to apply MD in Spanish valuation processes based in listed multiples. |
| first_indexed | 2024-12-24T03:34:36Z |
| format | Article |
| id | doaj.art-603df4343cca402f9ff6afe58a73f097 |
| institution | Directory Open Access Journal |
| issn | 1611-1699 2029-4433 |
| language | English |
| last_indexed | 2024-12-24T03:34:36Z |
| publishDate | 2019-02-01 |
| publisher | Vilnius Gediminas Technical University |
| record_format | Article |
| series | Journal of Business Economics and Management |
| spelling | doaj.art-603df4343cca402f9ff6afe58a73f0972022-12-21T17:17:07ZengVilnius Gediminas Technical UniversityJournal of Business Economics and Management1611-16992029-44332019-02-0120110.3846/jbem.2019.8101The marketability discount in Spanish valuation multiples: investors’ perception in listed companies versus private transactionsÁngel Rodríguez López0Gracia Rubio Martín1Department of Accounting and Finance, Complutense University of Madrid, Madrid, SpainDepartment of Accounting and Finance, Complutense University of Madrid, Madrid, SpainThe aim of this paper is to assess the fair marketability discount (MD) in the Spanish market for valuation multiples comparing public versus private transactions. The study finds that to obtain MD it is necessary previously to control by a battery of factors that affects ratios’ prices such as industry, firm size, profitability, risk, year and also other characteristics about the buyer. The interactions of MD with each variable showed different investors’ perceptions about non marketability enterprises explaining MD. The valuation methodology applied in the research was a cross section of 824 public and private acquisitions in the Spanish market from the period 2006−2017. This work represents important evidence, in a more integrated vision than previous literature, for analysts and regulators stressing the necessity to apply MD in Spanish valuation processes based in listed multiples.https://journals.vgtu.lt/index.php/JBEM/article/view/8101valuation multiplesratios analysismarketability discountilliquidity discountmarket ratio valuationEBITDA ratio |
| spellingShingle | Ángel Rodríguez López Gracia Rubio Martín The marketability discount in Spanish valuation multiples: investors’ perception in listed companies versus private transactions Journal of Business Economics and Management valuation multiples ratios analysis marketability discount illiquidity discount market ratio valuation EBITDA ratio |
| title | The marketability discount in Spanish valuation multiples: investors’ perception in listed companies versus private transactions |
| title_full | The marketability discount in Spanish valuation multiples: investors’ perception in listed companies versus private transactions |
| title_fullStr | The marketability discount in Spanish valuation multiples: investors’ perception in listed companies versus private transactions |
| title_full_unstemmed | The marketability discount in Spanish valuation multiples: investors’ perception in listed companies versus private transactions |
| title_short | The marketability discount in Spanish valuation multiples: investors’ perception in listed companies versus private transactions |
| title_sort | marketability discount in spanish valuation multiples investors perception in listed companies versus private transactions |
| topic | valuation multiples ratios analysis marketability discount illiquidity discount market ratio valuation EBITDA ratio |
| url | https://journals.vgtu.lt/index.php/JBEM/article/view/8101 |
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