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Contribution Details
| Type | Working Paper |
| Scope | Discipline-based scholarship |
| Title | The Choice of Valuation Techniques in Practice: Education versus Profession |
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| Institution | University of Zurich |
| Series Name | Swiss Finance Institute Research Paper |
| Number | 16-36 |
| Number of Pages | 59 |
| Date | 2016 |
| Abstract Text | We use a survey approach to learn about valuation professionals’ choices and implementations of valuation techniques in practice. The survey design allows us to control for a respondent’s professional subgroup (e.g., consulting), education, experience, and valuation purpose characteristics. We find support for the “sociological hypothesis” that profession matters more than education; different professions have different valuation cultures. Other factors are less important. There are also many commonalities across respondents. Most use both multiples and DCF, but implement DCF in a way that almost turns it into a multiples exercise. Confusion reigns with respect to interest tax shields and the WACC. Higher educational levels do not reduce the confusion. Our overall findings matter because valuation professionals function as intermediaries in the capital allocation process. The relative unimportance of education raises questions about the role and benefit of higher level finance education. |
| Free access at | DOI |
| Digital Object Identifier | 10.2139/ssrn.2784850 |
| Other Identification Number | merlin-id:13383 |
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