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| Type | Master's Thesis |
| Scope | Discipline-based scholarship |
| Title | Investment Valuation Practice and Policy |
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| Institution | University of Zurich |
| Faculty | Faculty of Economics, Business Administration and Information Technology |
| Number of Pages | 68 |
| Date | 2012 |
| Abstract Text | We survey 271 investment practitioners on investment valuation practice and policy. Particular focus was set on the implementation approach of relative valuation and discounted cash flow (DCF) models. We observe that the gap between investment valuation theory and investment valuation practice appears to be thinner than what highlighted by previous studies. Investment practitioners use the mainline models that receive wide academic support, namely discounted cash flow models and capital asset pricing model (CAPM). Beside these more sophisticated models, a consistently implemented relative valuation plays an important complementary role. However, the implementation of discounted cash flow (DCF) models is still subject to a great variety of practices, and the level of awareness on the implicit assumptions on riskiness of tax shield entailed in different discounted cash flow (DCF) models appears to be limited. |
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