Equity valuation: The effect of market share dynamics on the value of multiple product lines
Abstract
This paper discusses methodological aspects of equity valuation (stock pricing) in the context of continuous-time finance. The special emphasis of this study is to provide a framework and explicit formulas for the balance-sheet itemisation of the product line contributions to the welfare of the firm, and, in particular, the effect of product market share dynamics on the value of the product line, and on the value of the whole firm. The results were derived in the context of the general analytic theory of pricing and hedging of financial contracts in diffusive incomplete markets, and its applications in quantitative equity, both developed by the author in a series of previous works.
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Author's Biography
Srdjan Stojanovic is Professor of Mathematics in the College of Arts and Sciences at the University of Cincinnati. His research is in financial mathematics and, in particular, partial differential equations methods for pricing and determination of risk premium, with special emphasis on applications in interest rates, equity and foreign exchange.
Citation
Stojanovic, Srdjan (2009, June 1). Equity valuation: The effect of market share dynamics on the value of multiple product lines. In the Journal of Risk Management in Financial Institutions, Volume 2, Issue 3. https://doi.org/10.69554/DNLK8420.
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