Upload
jifeng-huang-
View
222
Download
0
Embed Size (px)
Citation preview
8/6/2019 How to Use Simulation to Evaluate a Interter Company
1/27
Otto-von-Guericke-University Magdeburg
Faculty of Management and Economics
Chair for Banking and Finance
Prof. Dr. Peter Reichling
A case study: Evaluate eBay.com with
real auction method and simulation
technology
SEMINAR PAPER
COURSE OF STUDY: VALUATION OF INTERNET FIRMS
NAME: ZHANG, BAODONG
Address: Moldern Str 4,
Zi.234, Magdeburg 39106
Student register number: 158819
1
8/6/2019 How to Use Simulation to Evaluate a Interter Company
2/27
1 INTRODUCTION ...................................................................................................................................3
2. CONTINUOUS-TIME MODEL AND DISCRETE VERSION OF THE MODEL ........................4
2.1 CONTINUOUS-TIMEMODEL...................................................................................................................... 4
2.2DISCRETE VERSIONOFTHE MODEL.......................................................................................................... 9
3.COMPANY BACK GROUND AND PARAMETERS ESTIMATION ............................................10
3.1 BACKGROUNDOFINTERNETCOMPANYEBAY............................................................................................10
3.2ESTIMATETHEPARAMETERS................................................................................................................... 13
4. RESULT OF SIMULATION ...............................................................................................................16
5. SENSITIVITY ANALYSIS .................................................................................................................20
6. CONCLUSION .....................................................................................................................................23
BIBLIOGRAPHY .....................................................................................................................................26
2
8/6/2019 How to Use Simulation to Evaluate a Interter Company
3/27
A case study: Evaluate eBay.com with real auction
method and simulation technology
1 Introduction
Evaluating Internet stock maybe the most appealing investment topic at
present. Due to the especial character of internet industry-- uncertainty
and shortness of history data, many traditional valuation approaches do
not work well or even seem to be reversed in this industry. Dotcom
companies continuously get high market value even with negative cash
flow.
From some traditional analysts point of view, the Internet stocks
have been bid up irrationally, the frenzy in the market is a spectacular
example of market bubble. Whereas other investors believe that with the
application of high technology Internet firm will dramatically transform
the way in which the business is transacted and will rapidly grow to
dominate their traditional competitors.
New methods and adjustment of traditional methods have been
adopted to justify the relative high market value of Internet company.
Real option is one of these methods. Eduardo Schwartz and Mark Moon
applied real options theory and capital budgeting techniques to the
3
8/6/2019 How to Use Simulation to Evaluate a Interter Company
4/27
8/6/2019 How to Use Simulation to Evaluate a Interter Company
5/27
the development of the company value2. An important determinant of
companys value is sales growth. In the simulation, different sales
growths induce to different cash flows. Under the consideration of costs,
loss carry forward, and tax, for each period net cash flow is obtained.
These cashes available generate compound risk free interest during the
time process. The firm value is present value of total cash available in
the end horizon of simulation.
In the model the sales growth is depicted with stochastic process in
which the growth rate evolves along its expected value and at the same
time it is subjected to volatility.
Another stochastic process is the expected sales growth rate. Since the
initial very high-expected growth cannot sustain for a long time, in the
long run it converges to a more reasonable or moderate level.
Assuming an Internet firm has an instantaneous revenue at time t, tR , the
following stochastic differential equation is used to depict the dynamic
of these revenue.
1dzdtR
dRtt
t
t += (1)
Where the drift, t, is the expected growth rate of revenue. t is the
volatility of in this growth rate. 1z is a random variable and subjects to
standard normal distribution if time increment is 1.
2 See Bhmer, C.(2001) p.10
5
8/6/2019 How to Use Simulation to Evaluate a Interter Company
6/27
The dynamic of the expected growth rate in revenue t is:
2)( dzdtkd ttt += (2)
In which the expected revenue grow rate t stochastically converges to
its long term more reasonable and sustainable rate of growth, . k
describes the speed of this process. 0 is the initial volatility of this
expected growth rate in revenue. 2z is a second random variable reflects
the draw from a normal distribution if time increment is 1.
The volatility in the rate of revenue growth, t, and the volatility of the
expected growth rate in revenues, t, also evolve during time. t
converges to a more normal level and t converges to 0.
dtkd tt )(1 = (3)
dtkd tt 2= (4)
The mean reversion coefficient 1k , 2k describe the speed these variables
converge to their means. The unanticipated changes in revenue growth
rate and the unanticipated changes in its drift are assumed correlated:
dtdzdz =21 (5)
To calculate the net cash flow generated in each period, the cost of the
revenue need to be considered. It is made up of two components: cost of
goods sold (COGS) and other expenses. The first item is assumed to be
proportional to the revenue and the second item has a fixed component,
F , and a variable which is also proportional to the total revenue.
6
8/6/2019 How to Use Simulation to Evaluate a Interter Company
7/27
FR
RFR
ensesOtherCOGSCost
t
tt
ttt
++=++=
+=
)(
)(
exp
(6)
Where is the COGS as a percentage of revenue and is the
percentage of other expenses relative to the total revenue.
The earning before interests, taxes, depreciation, and amortization
(EBITDA) at period t, tE is:
ttt CostRE = (7)
If the sum of EBITDA in period t and the loss carry forward in the same
period, tL , is positive, it subjected to tax. Otherwise the tax ratio is zero.
Therefore the after tax net cash flow at time t, tY , is given by:
)1)(( += ttt LEY , if 0tt LE + (8a)
or
)(tttLEY += , otherwise (8b)
If the cash available at time t is tX . The dynamic of this number is
given by:
dtYdX tt = (10)
For the simplicity case, the bankruptcy is defined as the situation where
the company runs out of cash, tX reaches 0. The definition of
bankruptcy neglects the fact that the company can raise cash, sell equity
or merge with other company when it run out of cash.
The objective of the model is to determine the value of firm at current
7
8/6/2019 How to Use Simulation to Evaluate a Interter Company
8/27
time, 0V . Again for the simplicity reason, it is assumed that the cash
generated in the operation remains in the company, earns a risk free rate
of interest and will not be distributed to shareholder until in the end
period of simulation. According to these assumptions, the company
value equals to the expected value of the firm in the end of simulation
discounted under risk neutral measure at the risk free rate.
At the end period of simulation, T, the firm value has two
components. One is the accumulated cash available TX , another is the
continuing value of the company at time T. The continuing value is
calculated as a multiple M of the EBITDA at time T, TE . The multiple
employed by Schwartz and Moon is 10, which is an average value for
mature company and is also industry independent. Following this
process each simulation path will determine one possible firm value.
[ ] rTtttQt eXCRMEV
+= *)( (11)
where rTe is the continuously compounded discount factor.
Considering the uncertainties in the model, uncertainty of changes in
sales and uncertainty of growth rate in sales, Schwartz and Moon
obtained the risk-adjusted equations for the variables stated in equation
(1) and (2):
+= 11 )( dzdtR
dRttt
t
t (12)
( )[ ]
+= 22 dzdtkd tttt (13)
8
8/6/2019 How to Use Simulation to Evaluate a Interter Company
9/27
The asterisk stands for the risk adjustment of the process. 1, 2 are
market price for the factor risk. In this eBay case, the values of these
parameters are assumed to be 0.123 and 0.025 which0.025, which were
used by Bhmer3 for the valuation of Amazon.
2.2Discrete Version of the Model
To imply Monte Carlo simulation to solve the value of Internet firm, the
discrete version of the risk-adjusted process is depicted in Schwartz and
Moons article:
[ ] }2/*{ 121 tt
ttt
tttt
eRR+
+= (17)
( ) 22
2
211 t
k
e
kee
t
tk
ttk
t
tk
tt +
+=
+ (18)
Where
( )tktkt
ee 11 10
+= (19)
and
tk
te 20
= (20)
Considering 1 and 2 are random variables drown from standard
normal distribution and possible to be negative, in the simulation of
eBay case, they were set out side of the squared root.
If losses generated in the operation are indicated by negative number, for
3 See Bhmer, C.(2001)
9
8/6/2019 How to Use Simulation to Evaluate a Interter Company
10/27
example, loss carry forward may either be negative or zero and can
never be positive, the discrete change in total cash available at time t,
tX can be depicted as:
{ } { }ttttttLLELEX +++= 0,min)1(0,max (21)
The last two term in equation 21 indicates the change in the carry
forward loss in current period t, L ,:
{ }tttLLEL += 0,min (22)
Before estimating the parameter and carry out simulation, it is necessary
to get some basic knowledge about eBay.
3.Company back ground and parameters estimation
3.1 Background of internet company eBay
Ebay is known as the king of online auction houses today.
It was founded in September 1995 and was incorporated in may 1996. In
early 1998, it has only about 30 employees and 300000 users who
generated less than $200 million annualized merchandise sales,
primarily in collectible categories. Just four years later, in 2001, gross
10
8/6/2019 How to Use Simulation to Evaluate a Interter Company
11/27
merchandise sales have grown by 72% to more than $9.3 billion. Its own
net revenue grew from 41.37 million to 748.821 million. It evolves to a
market place where businesses and individuals buy and sell collectibles,
automobiles, high-end or premium art items, jewelry, consumer
electronic and a host of practical and miscellaneous items. More than
$30 million goods are traded on this marketplace everyday.
In September 1998 eBay went to public. On the first day of IPO, eBays
stock soared to three times the offer price.4 At present (Dec. 23rd 2002)
its share price grew to $70.1 from $7.896 four years ago.5 Figure 1
shows the development of eBays share price. And the quarterly sales,
COGS, expenses and other basic financial data for the past four-quarter
from Q4 2001 to 3Q 2002 are given by table 1.
4 Business: Not quite another eBay, The Economist, Mar 10, 20015http://quotes.nasdaq.com/quote.dll
11
http://quotes.nasdaq.com/quote.dllhttp://quotes.nasdaq.com/quote.dll8/6/2019 How to Use Simulation to Evaluate a Interter Company
12/27
Figure 1: eBay share price, Oct 1998Dec.20026
Table1: Quarterly sales and Costs for eBay, Dec. 2001- Sep. 20027
Quarter Ending 9/30/2002 6/30/2002 3/31/2002 12/31/2001Total revenue 288.779 266.287 245.106 219.401Cost of Revenue 45.374 44.561 41.277 39.989
Gross profit 243.405 221.726 203.829 179.412Operating Expenses:
R&D 24163 24346 24307 21723
Sales, General &Admin. 127.886 116.831 107.276 103.681
Other Operating Items 1239 1108 1530 12390
sum of operat. cost 25529.886 25570.831 25944.276 34216.681
EBITDA 115.519 104.895 96.553 75.731
6http://quotes.nasdaq.com/quote.dll
7 www.nasdaq.com
12
http://quotes.nasdaq.com/quote.dllhttp://quotes.nasdaq.com/quote.dllhttp://quotes.nasdaq.com/quote.dll8/6/2019 How to Use Simulation to Evaluate a Interter Company
13/27
3.2Estimate the parameters
The simulation is performed with the information available on the date
of 30th Dec. 2002. To carry out the simulation, more than 20 parameters
are need.
Among these parameters, the initial revenue, initial loss carry forward
and initial cash balance can he obtained directly from eBays income
statement and balance sheet for the third quarter of 2002. But some
others cannot be observed and have to be estimated. Estimating these
parameters is a challenging issue because it needs thorough knowledge
about the industry and the particular company. Figure 2 shows the sales
growth rapidly during the past 11 quarters from Q1 2000 to Q3 2002.
Figure 3 shows that the growth rate in revenue for the same period
which were relative high in the beginning and then declined.
13
Figure2: eBay quarterly Sales, Q1 2000--Q3 2002
050000
100000
150000
200000
250000
300000
350000
Q1
2000
Q2
2000
Q3
2000
Q4
2000
Q1
2001
Q2
2001
Q3
2001
Q4
2001
Q1
2002
Q2
2002
Q3
2002
Sales
8/6/2019 How to Use Simulation to Evaluate a Interter Company
14/27
The initial expected growth rate in revenue, 0 , is calculated by taking
the average growth rate over the past 7 quarters (2001,1st 2002,3rd). The
initial volatility of growth rate in revenue, 0 , is the standard deviation
of the same period. According to the article of Schwartz and Moon
(2000), the initial volatility of expected growth rate in revenue can be
referred from the stock price volatility. In this context, the parameters
estimated by the authors for Amazon is used as a benchmark to
determine that of eBay. The share price volatility of Amazon is
compared with that of eBay during the period of 1999-2000, and eBays
initial volatility of expected sales growth rate is obtained by:
0 (eBay)= 0 (Amaz.) * (eBay) / (Amaz.) =0.03*17.353861/19.191511=0.027127
(23)
where is the standard deviation of the share price. For simplicity, it is
assumed that the unanticipated changes in growth rate and expected
growth rate in revenue do not correlated. It is also assumed that the long-
14
Figure3: eBay Quartely Sales Growth Rate Q2 2000-Q3 2003
00.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
0.18
Q2
2000
Q3
2000
Q420
00
Q1
2001
Q2
2001
Q3
2001
Q4
2001
Q1
2002
Q2
2002
Q3
2002
Sales Growth Rate
8/6/2019 How to Use Simulation to Evaluate a Interter Company
15/27
term growth rate in revenue is 1.5 percent per quarter (6 percent per
year). The long-term volatility in the growth rate of revenue is 1 percent
per quarter (2 percent per year). Corporate tax is 0.35. The yield to
maturity rate of American treasury strip bond serves as risk free rate. The
rate of the bond, which matures in February 2025, is 0.015 per quarter.
The three speed-of-adjustment mean reversion coefficient, k , 1k , 2k ,
are assumed to be the same as that of Amazon.
Figure 4 shows the relationship between COGS and Sales. Figure 5
shows the relationship between selling, general, and administrative
expenses (SG&A) and sales.
20000
25000
30000
35000
40000
45000
50000
COGS($000)
50000 100000 150000 200000 250000300000
Sales($000)
100
110
120
130
SG&A($000)
200 225 250 275 300
Sales($000)
Figure 4: eBay COGS verse Sales Figure 5: eBay SG&A verse Sales
Due to the business character of eBay, COGS does not occupy an importantplace in the total sales. In the contrary, SG&A has a much bigger potential in
the total sales. The percentage of COGS in sales, , is estimated as 0.19.
Variable component of operating cost, , is 0.45. The fixed cost
parameter F is assumed to be 39901($000). Finally, one quarter stands
for one time increment and the horizon for estimation is 24.75 years. The
15
8/6/2019 How to Use Simulation to Evaluate a Interter Company
16/27
terminal value for eBay in the end of 24.75 year is assumed to be 10
times of EBIDA for the end period.
Table 2 shows these parameters and their estimations for the
implementation.
Table2: Parameters used in valuation of eBay
Parameter (quarterly) Notation Estimation
Initial Revenue ($000) R 0 228779Initial loss carry-forward ($000) L0 0
Initial cash balance ($000) X 0 748,623Initial expected rate of growth in revenues 0 0.09
Initial volatility of growth rate in revenues 0 0.042285
Initial volatility of expected rate of growth inrevenue
0 0.027127
Correlation between percentage change inrevenues and change in expected rate of growth
0
Long-term rate of growth in revenue 0.015Long-term volatility of the rate of growth in revenue. 0.01Companys corporate tax rate 0.35
Risk-free interest rate r 0.015Speed of adjustment for the rate of growth process k 0.07Speed of adjustment for the volatility of revenueProcess
k1 0.07
Speed of adjustment for the volatility of the rateof growth process
k2 0.07
COGS as a percentage of revenues 0.19Fixed component of other expenses ($000) F 27701.5Variable component of other expenses 0.45Market price of risk for the revenue factor 1 0.123
Market price of risk for the expectedRate of growth in revenues factor1
0.025
Horizon for the estimation T years 24.75Time increment for the discrete version of the model quarters 1
4. Result of simulation
For estimating the basic value of eBay, the discrete-time formulas
16
8/6/2019 How to Use Simulation to Evaluate a Interter Company
17/27
depicted in section 2 are used to build an Excel file. The parameters in
table 2 are substituted into this file. For every round of the simulation,
the total cash available for eBay in the end of 24.75 year is calculated
and discounted with risk free interest by computer. Totally the
simulations are carried out for 900 times. Although 900 times of
simulation is not a small number which needs an Excel file with 90000
rows, the times of simulation is still relatively low compared with that of
Schwartz and Moon (2000) where 100000 times were performed.
Therefore the results illustrated below may not present or even distort
the findings if the simulations are performed in large numbers.
The mean of the 900 simulations suggested that the value of eBay is
39.7079 billion. The possibility of bankruptcy is 1 out of 900. The total
shares of common stock of eBay in the end of 2001 is 288.166 million
which is calculated according to eBays 2001 financial annual report.8
The market price on 23 Dec. 2002 is $70.1 per share. The simulation
suggested that eBay is undervalued at present.
The following figure 6 shows the distribution of the eBays simulated
sale paths.
8
17
8/6/2019 How to Use Simulation to Evaluate a Interter Company
18/27
Figure 6: Quartiles of 900 simulated paths of the sales
development for eBay( in $000)
0
2000000
4000000
6000000
8000000
10000000
Year 1 Year 5 Year 10 Year 15 Year 20 Year
24.74
90.0%
75.0%
50.0%
25.0%
10.0%
The vary top two lines contain 15% of sales paths with higher outcomes
and are very wide spread. The lowest two lines which contain 15% of
the sales pathes with lower outcomeslines that contain 15% of the sales
pathes with lower outcomes are very close to each other. According to
simulated paths, the quarter sales after 24 years range from $538 million
to $9 billion. Contrary to this wide spread, in the end of first year,
quarter sales range from $274 million to $375million. It can be shown
that in the later period extreme high sales are possible but not very
likely. It should be mentioned that due to the relatively low number of
simulations carried out in this example case, the realization of extreme
high sales might be putted to relative high weight compared to that of a
large number of simulation.
18
8/6/2019 How to Use Simulation to Evaluate a Interter Company
19/27
Contrary to the sales paths, the distribution of expected growth rate in
sales spread wider in the initial period and narrower in the later period.
Figure7 show the distribution of expected growth rate in revenue in 1
year, 5 year, 10 year and 24.75 year. After 1 year, the growth rates range
from 0.0543 to 0.1804. 24 years later, they range from 0.01411 to
0.01594. As time passes the sale rate converges to its long-term rate
0.015.
1year 5Year
0,05
0,10
0,15
ProbabilityAxis
0 0,1
0,05
0,10
0,15
ProbabilityAxis
0 0,1
Fitted Normal(0,07018,0,0413) Fitted Normal(0,02931,0,03246)
10year 24.75 year
0,05
0,10
0,15
0,20
Proba
bilityAxis
-0,02 0 0 ,01 0 ,02 0 ,03 0 ,04 0 ,05
0,050,10
0,15
0,20
Proba
bilityAxis
0,015 0,016
Fitted Normal (0,01782,0,01111) Fitted Normal(0,015,0,00028)
Figure 7:Expected growth rate in sales distribution for eBay after 1 year, 5,year, 10 year and 24.75year.
19
8/6/2019 How to Use Simulation to Evaluate a Interter Company
20/27
Figure 8 show the distribution of companys value resulting from 900
simulations and the frequency of each outcome. The distribution is
obviously skewed to the left side and shows that extremely high value of
the firm is possible but has low possibility. The mean of the simulated
companys value is 39.7079 billion and lies in the left side of the figure.
Figure8: Distribution of eBay's firm value resultingfrom 900 simulations(in $000)
020406080
100120140
50000
00
250000
00
450000
00
650000
00
850000
00
1050000
00
1250000
00
1450000
00
1650000
00
1850000
00
2050000
00
2250000
00
2450000
00
2650000
00
2850000
00
3050000
00
3250000
00
3450000
00
Frequency
Hufigkeit
5. Sensitivity analysis
In table 3, the sensitivity of eBays value to the critical parameters has
been showed.
Table3:Sensitivity of eBay's value relative to changed parameters
20
8/6/2019 How to Use Simulation to Evaluate a Interter Company
21/27
Parameter Value of perturbedparameter
Total eBay value($000)
Sensitivity Probability ofBankruptcy
Base case 39707915.7 1/900Miu0 0.099/quarter 45360719.05 1.423596 0
Sigma0 0.0465135 39508704.82 -0.05017 0
E(miu) 0.0165 43599332.55 0.98001 0
E(sigma)) 0.011 39377109.95 -0.08331 0
k 0.077 35636836.3 -1.02526 0
k1 0.077 39890884.67 0.046079 0
k2 0.077 38391322.68 -0.33157 0
Alfa 0.2 38562445.2 -0.28847 0
Beta 0.46 38562445.2 -0.28847 0
Aita 0.029839 43861390.85 1.046007 3/900
Fixed cost 43891.1 38373993 -0.335934 2/900
These numbers were obtained when 10 percent higher value of theindicated parameter(except for and ) was substituted into the
equations while the other parameters are the same as the base valuation.
It can be seen that several parameters in the table have a significant
effect on the value of the firm. Two of them are initial expected growth
rate in sales and the long-term growth rate, which has sensitivity 1.42
and 0.98 respectively. The second high sensitive parameter is 0 , the
initial unanticipated change in the expected revenue growth rate, which
has a sensitivity of 1.04. Comparing with the parameters found by
Schwartz and Moon for Amazon, the most critical factor for the value of
21
8/6/2019 How to Use Simulation to Evaluate a Interter Company
22/27
eBay is the initial expected growth rate in revenue rather than the
variable component of the cost function, and . The reason behind
that maybe is the business characteristic of eBay. As mentioned above
COGS does not occupy an important potential in the total sales. And the
potential of SG&A relative to sales is higher than Amazon but the profit
margin is much greater than that of Amazon. Therefore one percent
increases in and do not affect the firm value very much.
As reported by Schwartz and Moon, the parameters for the stochastic
process of changes in the revenue growth rate, 0 and k , affect
Amazons value very significantly. This is also the case of eBay. These
parameters determined the distribution of the future expected growth
rate in revenue. It can be shown that 0 positively related to variance of
the distribution. 0 is the initial volatility of revenue growth rate. Since it
converges to 0, the higher the initial value, the larger initial variance in
the process.
k is the higher speed the growth rate in revenue converges to it long
term level. The larger the value of k, the more quickly the initial high
growth rate decrease, the smaller the possibility that the growth rate
maintain a high initial level. Therefore, k has a negative effect on the
companys sales and then the same effect on the firms value.
22
8/6/2019 How to Use Simulation to Evaluate a Interter Company
23/27
The relationship between 0 and firm value reported in table 3 indicates
that the variance of the distribution of future sales growth rate
determines the value of the firm in a positive way. The reason behinds
this is, if eBays revenue achieves anextreme high growth rate, it enjoys
an extreme high market value; if it suffers an extreme low growth rate, it
may go to bankruptcy, the worst case is to get a zero market value.
Schwartz and Moon explained this as the option character of the firm
value. By analogy with financial options, the value increases when
uncertainty increases.
Consider the initial uncertainty in sales, 0 , contrary to 0 , it has a
negative effect on the total firm value. Bhmer interpreted this as that
higher volatility in sales means higher risk which leads to lower value.
Investor values uncertainty about expectation as a chance( positively)
and values volatility in sales as risk (negatively)9. The classic
evaluation theory is observed in this situation. The number in table also
reports that the sensitivity of eBays value to the initial volatility of
revenue is smaller than the sensitivity to initial volatility in expected
growth rate.
6. Conclusion
This paper adopts Schwartz and Moons simulated based model to
9 see Bmer, C (2001) p.18.
23
8/6/2019 How to Use Simulation to Evaluate a Interter Company
24/27
examine the market value of Internet company eBay. The model is based
on some assumptions such as the behavior of the company revenue
growth rate, future financing opportunities, dividends policy, horizon fo
estimation and so on. The advantage of this model is that it incorporates
the uncertainty in the development of the company and has the ability to
depict the real option character of the firm. The disanvantage is it is
based on some assumptions mentioned above and the final result is
highly dependent on the estimations of the input parameter.
This case study also examined eBays financial report and considered its
business character. Based on these analysis, the parameters needed by
the simulation were observed or estimated. The simulations were
performed for 900 times and the mean of these simulation results were
calculated. Although the final result is very sensitive to these
assumptions and inputted parameters, the result suggested that at present
the market value of eBay is under valuated. For simplicity case, this
case study did not examine the capital structure of eBay and not
determine the share value.
1.
2.
24
8/6/2019 How to Use Simulation to Evaluate a Interter Company
25/27
25
8/6/2019 How to Use Simulation to Evaluate a Interter Company
26/27
Bibliography1. Amazon annual report(2001)(Form 10-K)
http://amazon.com, visited December 25th , 2002
2. Amazon stock price and chart
http://quotes.nasdaq.com/quote.dllvisited December 23rd , 2002
3. Bhmer, C (2001) Valuation of dot.com,International Finance, St.
Gallen: University of St. Gallen
4. Business: Not quite another eBay, The Economist, Mar 10, 2001
5. eBay annual report 1999(Form 10-K), internet:
http://www.shareholder.com/ebay/annual.cfm ,
6. visited December 25th , 2002
7. eBay annual report 2001(form.10-K), internet:
http://www.shareholder.com/ebay/annual.cfm,visited December 25th , 2002
8. eBay stock price and chart
9. http://quotes.nasdaq.com/quote.dll
visited December 23rd , 2002
8. Hull,J,(2000): Options, Futures, and Other Derivatives, 4th
Edition,Upper Saddle River, NJ: Prentice-Hall international.
26
http://amazon.com/http://quotes.nasdaq.com/quote.dllhttp://www.shareholder.com/ebay/annual.cfmhttp://www.shareholder.com/ebay/annual.cfmhttp://quotes.nasdaq.com/quote.dllhttp://quotes.nasdaq.com/quote.dllhttp://amazon.com/http://quotes.nasdaq.com/quote.dllhttp://www.shareholder.com/ebay/annual.cfmhttp://www.shareholder.com/ebay/annual.cfmhttp://quotes.nasdaq.com/quote.dll8/6/2019 How to Use Simulation to Evaluate a Interter Company
27/27
9.Leuhrman,T.,1998, Investment Opportunities as real options:
Getting Started on the Numbers, Harvard Business Review, July-
August, pp.51-67.
10. Rajgopal, S.; Kotha, S.; Venkatachalam, M.: The Relevance of
Web Traffic for Stock Prices of Internet Firms,
http://us.badm.washington.edu/kotha/personal/pdf
%20files/Internet%20paper.pdf
11 Schwartz, S. E.; Moon, M(2000) Rational pricing of internetcompanies,Financial Analysts Journal, Vol.56, No.3, pp.62-75
12.Trueman,B.; Wong, M.H.H; and Zhang,X.-J. (2000): The eyeballsHave it: Searching for the value in Internet Stocks,Journal of Accounting
Research, Supplement 2000, Vol.38, USA,pp.137-162.