Proceedings of the International Workshop on Navigating the Digital Business Frontier for Sustainable Financial Innovation (ICDEBA 2024)

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An Evaluation of the DDM Model and FCFF Model Using in valuing the Large Listed State-owned company——Taking China Mobile as An Example

Authors
Junyi Hu1, *
1Fudan University, No. 220, Handan Road, Yangpu District, Shanghai, 200437, China
*Corresponding author. Email: 23307110151@m.fudan.edu.cn
Corresponding Author
Junyi Hu
Available Online 24 February 2025.
DOI
10.2991/978-94-6463-652-9_40How to use a DOI?
Keywords
company valuation; dividend discount model; free cash flow to the firm model; infrastructure construction with non-profit; cyclical
Abstract

This article introduces the basic role and methods of company valuation and then link the valuation of the listed company to the value of its stock. Listed state-owned companies hold an important position in the Chinese financial market. This article evaluates the advantages and disadvantages of the dividend discount model and the free cash flow to the firm model in the valuation of large listed state-owned companies. Taking China Mobile as an example, two models were used to calculate the value per share and compare it with the value per share evaluated by authoritative institutions. The results obtained from both models overestimate the value of the company’s stock, with FCFF having a larger error and is almost ineffective in valuing China Mobile. This is related to the special nature of China Mobile, like the cyclical characteristics of this company and its functions of infrastructure construction. And it also related to the COVID-19 epidemic in 2019-2022.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the International Workshop on Navigating the Digital Business Frontier for Sustainable Financial Innovation (ICDEBA 2024)
Series
Advances in Economics, Business and Management Research
Publication Date
24 February 2025
ISBN
978-94-6463-652-9
ISSN
2352-5428
DOI
10.2991/978-94-6463-652-9_40How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Junyi Hu
PY  - 2025
DA  - 2025/02/24
TI  - An Evaluation of the DDM Model and FCFF Model Using in valuing the Large Listed State-owned company——Taking China Mobile as An Example
BT  - Proceedings of the International Workshop on Navigating the Digital Business Frontier for Sustainable Financial Innovation (ICDEBA 2024)
PB  - Atlantis Press
SP  - 384
EP  - 393
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-652-9_40
DO  - 10.2991/978-94-6463-652-9_40
ID  - Hu2025
ER  -