Tech Stock Valuation

Tech Stock Valuation

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The contribution of research and development to a company's market value has grown considerably in recent years. In the mid-1970s, accountants were able to capture on their ledgers 90-95% of a firm's book value, but by 2000 the importance of intangible assets had grown to the point where they could account for only 13-15%. Financial economists and accountants have investigated the link between a firm's market value and its RaD spending, and various factions advocate a variety of positions on the amount and rate of investment, investors' ability to capture returns on that investment, and ways to measure value, investment, and returns. 'Tech Stock Valuation' extends the RaD literature by providing detailed direct evidence on the market value implications of inventive and innovative output. Specifically, the book demonstrates that stock-price effects of patent output are most pronounced in the case of of high-quality patents, where patent quality is measured by scientific merit. Scientific measures of patent quality give tech stock investors and RaD managers a valuable new tool that can be used to measure RaD program effectiveness. At the same time, it gives investors a new tool to help them assess the value of hard-to-measure intangible assets. *Provides detailed direct evidence on the market value implications of inventive and innovative output *Based on recent research, much of which Dr. Hirschey has pioneered *Gives financial professionals a new tool for assessing RaD quality and its relation to market valuationIndeed, there has been remarkable uniformity in the conclusions of studies done on all forms of technical analysis. ... extreme bubble-like prices appear to have been paid at various times for a€œgo-goa€ computer (a€œtronicsa€) stocks, a€œnifty fiftya€anbsp;...

Title:Tech Stock Valuation
Author:Mark Hirschey
Publisher:Academic Press - 2003-09-18


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