Evaluation of the fair value using the profitability multiplier indicator (an analytical study of the Bank of Baghdad for the period from 2012-2021)

Abstract

The research aims to explain the role played by the profitability multiplier index in evaluating the fair value of shares. The research problem came in the divergence of the value of ordinary shares from their fair value, due to the lack of reflection of information (public and private) in stock prices, and this leads to weak market efficiency and failure to achieve fair value.  The end is not making the right investment decision, and this affects the achievement of the profits that the investor aims for, and the hypothesis of the research came in that the profitability multiplier index has an effective role in extracting the fair value of the shares, which reflects all the information received from the Iraqi market for securities, and the conclusion reached by the researcher is The possibility of using the profitability multiplier indicator in evaluating the fair value based on the results it reached in the evaluation process, and the Bank of Baghdad was used as a main sample in the research