RT Journal Article
SR Electronic
T1 New Horizons of Behavioral Valuation
JF The Journal of Private Equity
FD Institutional Investor Journals
SP jpe.2019.1.094
DO 10.3905/jpe.2019.1.094
A1 S. Yu. Bogatyrev
YR 2019
UL https://pm-research.com/content/early/2019/10/09/jpe.2019.1.094.abstract
AB The study described in this article seeks to solve the problem of investment decisions in the current environment, where investor irrationality comes to the front and blinds traditional classical analytical tools. During the post-crisis period it becomes a problem not only for Russian valuation analysts but globally as well. The present study uses behavioral finance methodology to solve this problem. To illustrate the solution, we used the discounted cash flow valuation techniques on a huge amount of on-sale Russian businesses and then applied quantitative financial solution methods to process the multiple results.TOPICS: Private equity, factor-based models, developed marketsKey Findings• The article provides its reader with a strict, consistent and interconnected analytical instruments to measure how sentiments have an influence on prices and lead to different interpretations of risks and returns in behavioral finance theories.• The reader can take away from the methodology described in the article how sentiment is reflected in the stochastic discount factor.• After reading the article the reader has the illustrated on a particular M&A market methods of implementation of the stochastic discount factor-based behavioral pricing theory.