||Based on the discounted cash flow model, this study aims to evaluate the Taiwan 50 exchange fund firms and public listed companies in Taiwan, within the time frame from 2000 to 2009. An investment strategy is resulted from getting the calculated corporate value divided by the real market value. This study seeks to know whether the strategy is valid and profitable.|
All of the required data are collected from Taiwan Economic Journal (TEJ), and this study uses the SAS program to calculate the data and do the corporate evaluation. The following are conclusion and suggestion of this study.
One, when applying the discounted cash flow model to do the corporate evaluation, the result of cash flow will be affected by some factors, such as net income after taxes, net income growth rate, and equity growth rate.
Two, the t test shows, within the time frame from 2000 to 2009, the investment strategy is valid in Taiwan 50 exchange fund firms, Information Service, Tourism, as well as Finance and Insurance Industry; the investment returns are 21, 54.31, 45.51 and 20.73 percent respectively.