Using The Edward-Bell-Ohlson Model to Value Small and Entrepreneurial Type Businesses

Michael F. Spivey
Clemson University

Jeffrey J. McMillan
Clemson University

Abstract: This study statistically examines the ability of the Edwards-Bell-Ohlson (EBO) model and other stock valuation models to estimate actual market value for a sample of small businesses. Studying small businesses is important as financial theory often falls short when applied to them. Actual stock price was compared to predicted stock values produced by EBO models and more traditional market based valuation models.

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