Session

Management, Business and Economics

Description

Valuation is an important component of the bank appraisal since it determines the financial position of the common stocks. The work identifies the deviation of the intrinsic value from the shareholders book value, not the market price of the Kosovo commercial banks. The study use accounting items composed from the audited financial statements of the 10 selected banks operating in the Kosovo banking industry. The methodology stands on the discounted cash flow model adjusted for the bank specific characteristics. The absence of the Kosovo Stock Market generated certain limitations during the valuation process where the cost of equity and beta coefficients were obtained from Damodaran Database. Results of the work show huge deviation between book value of the banks and their estimated intrinsic value.

Keywords:

Estimated Value, Commercial Banks, Financial System.

Session Chair

Hasan Metin

Session Co-Chair

Leonita Braha Vokshi

Proceedings Editor

Edmond Hajrizi

ISBN

978-9951-550-19-2

First Page

105

Last Page

114

Location

Pristina, Kosovo

Start Date

26-10-2019 3:30 PM

End Date

26-10-2019 5:00 PM

DOI

10.33107/ubt-ic.2019.359

Included in

Business Commons

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Oct 26th, 3:30 PM Oct 26th, 5:00 PM

Modeling the Estimated Fundamental Value of the Kosovo Commercial Banks

Pristina, Kosovo

Valuation is an important component of the bank appraisal since it determines the financial position of the common stocks. The work identifies the deviation of the intrinsic value from the shareholders book value, not the market price of the Kosovo commercial banks. The study use accounting items composed from the audited financial statements of the 10 selected banks operating in the Kosovo banking industry. The methodology stands on the discounted cash flow model adjusted for the bank specific characteristics. The absence of the Kosovo Stock Market generated certain limitations during the valuation process where the cost of equity and beta coefficients were obtained from Damodaran Database. Results of the work show huge deviation between book value of the banks and their estimated intrinsic value.