Firm valuation and an application on ISE electricity index

The objectives of this thesis are to explain most used firm valuation methods and using thegiven methods to implement the behave of five companies which are listed on ISEElectricityIndex.Chapter 1 deals with valuation concept and also different definitions of valuation in relatedliterature. In Chapter 2, widely used valuation techniques which are called asset valueapproach, relative valuation approach and discounted cash flow approach are viewedtheoretically. The application part of this study is given in chapter 3. In this part, firstlyfinancial statements of firms are analyzed for the data between 2005 and 2009 by financialratios. After this approach relative valuation techniques and discounted cash flowmethods are respectively applied on related firms. At the end of this study, the results,which are obtained with the valuation methods, are compared with the observed marketlowest and highest price range of these companies on Istanbul Stock Exchange during theyear of 2010.Finally, the result shows that the discounted cash flow method is more successful thanother firm valuation approaches in estimation of market price of related companies in2010.