The aim of this paper is to investigate on a sample of
firms listed on Italian Stock Exchange from 2000 to
2006 which comparables selection method generates the
most precise forecasts when valuing with price/earnings,
price/book value, price/sales, enterprise value/EBIT
and enterprise value/FCF multiples. Comparables firms
are selected based on industry membership, industry and
size, industry and ROA, ROA and size and averaging
with the arithmetic mean, median and harmonic mean,
therefore are analyze twelve multiple valuation methods.
The empirical results suggest that valuation with a
selection of comparable firms on the basis of industry
and ROA or industry and size is more accuracy; moreover,
valuation improves when multiples are averaged
using median relative to arithmetic and harmonic mean
