An empirical study of the relevance of intangible capital on the valuation of utility companies

• Main Authors: Chan, Jhaye Allison Randell A., Dychiching, Aileen Vanessa T., Ng, Jon Miko U. K., Ng, Winnie Cressida S.
• Format: text
• Language: English
• Published: Animo Repository 2010
• Subjects: Capital > Philippines; Stocks > Prices > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/18532
• Institution: De La Salle University

The study aims to quantify the value relevance of intangible capital (IC) for stock prices using IC-included accounting valuation model. Proponents applied a two stage-discounted residual income model (DRI) to measure the utilities companies' IC and data needed were taken from the Philippine Stock Exchange comprising thirteen companies and five-year time frame. Proponents utilized multiple regression panel data models to derive empirical results. These showed that a firm's IC-measured fundamental value is not highly correlated with its stock price, the joint explanatory power of IC and book value for stock prices is not superior to that of earnings and book value and lastly, incorporating IC in the accounting-based valuation model increases the explanatory power for stock prices.