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- Title
IPO Pricing Using the Implied Growth Rate in Cash Flow Valuation.
- Authors
Christofi, Andreas; Bailey, Barrie; Carroll, Marc
- Abstract
This paper applies a methodology that can be used to determine the valuation of IPOs, given the information available at the time of the offering. The paper uses the discounted cash flow approach but rather than solving for the price, it solves for the perpetual implied growth rate inherent in the firm's cash flows to equity. The advantage of the proposed methodology is that it makes it possible to compare the resulting implied growth rate of the respective firm to its corresponding industry benchmark rate.
- Publication
Journal of Business & Economic Studies, 2015, Vol 21, Issue 1/2, p50
- ISSN
1063-343X
- Publication type
Academic Journal