Skip to the main content

Economic Thought and Practice, Vol. 14 No. 1, 2005.

Preliminary communication

VALUATION OF GROWTH FIRMS: THEORETICAL MODELING

Damir Tokic ; University of Houston – Downtown

Full text: english pdf 200 Kb

page 13-23

downloads: 260

cite

Abstract

This study models the value of growth firms using the modified investment opportunities approach to valuation. The proposed model suggests that the value of a growth firm is function of: 1) profit margins, 2) investments in growth, and 3) the level of growth opportunity. Theoretical predictions suggest that the value is maximized when: 1) the growth opportunity exists and profitability multipliers are significant, 2) profit margins are high, and 3) the investment in growth is optimal.

Keywords

growth firms; profit margins; growth opportunity; profitability multipliers

Hrčak ID:

222774

URI

https://hrcak.srce.hr/222774

Publication date:

2.6.2005.

Visits: 840 *