Relation of The Intrinsic Value Of Companies and Share Prices on The Stock Exchanges of Central and Eastern European Transition Countries

Džafer  Alibegović

Džafer Alibegović

Keywords: intrinsic value, market price, stock exchanges, stock index, central and eastern Europe

Abstract

This paper examines the relationship of the intrinsic value of companies and the price of their shares on stock exchanges. The research is based on an analysis of indicators of intrinsic values and market price trends among 37 companies from 7 stock exchanges in central and eastern European transition countries. Although a number of studies have confirmed a strong relationship between the intrinsic value of the company and the market price of shares on the stock markets of developed countries, this paper finds that such relationships in the case of companies from transition stock exchanges do not exist. Rather, a direct and very strong relationship exists among the share market price trends and among the leading market indexes of the observed stock exchanges.

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Author Biography

Džafer Alibegović

University of Sarajevo, School of Economics and Business, Bosnia and Herzegovina
E-mail: dzafer.alibegovic@efsa.unsa.ba

Dzafer Alibegovic, PhD, was born in 1974 in Travnik, Bosnia and Herzegovina. He graduated from the Faculty of Economics in Sarajevo in 1999, where he earned his master’s and PhD degrees. He is currently employed as an assistant professor with the Sarajevo School of Economics and Business. He has authored of dozens of articles published in scientific and professional magazines and con- ference proceedings, co-authored a textbook, and authored or co-authored various research studies and projects in the field of capital market development in Bosnia and Herzegovina. His primary field of interest is financial analysis and the functi- oning of capital markets. He is also frequently involved in professional trainings and seminars in the area of professional intermediation in capital markets, accou- nting, and auditing.

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