The Effect of the Profitability on the Valuation Models: Evidence from Italian Acquisitions

  •  Marco Angelo Marinoni    
  •  Anna Maria Fellegara    


The aim of this study is to analyse the behaviour of the book-to-market index, B/MV, on a sample of Italian listed companies that completed a M&A operation in the span 2008-2016, the decade of the economic-financial crisis. Moreover the authors' interest in investigating the relationship between the market index and the income and non-earnings performance index. The study has verified whether the listed Italian companies sampled have book-to-market indices in line with corporate performance in terms of profitability, and therefore of general economic, patrimonial and financial equilibrium. The intention is to consider if the market manages to "capitalise" corporate trends regularly and with what intensity. The hypothesis concerns the possibility that the B/MV may be more affected by financial market externalities than by the specific economic and financial outlook in terms of market capitalisation. The profound geopolitical and macroeconomic changes of the last few decades and the consequent multiple corporate crises, have undoubtedly called into question the validity and reliability of certain valuation assumptions.

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