@article{jfe20251323,
author={{Saad, Mohamad and Bajalan, Saeed and Tehrani, Reza},
title={Examining How Changes in NPV Affect Fluctuations in Fair Stock Value},
journal={Journal of Finance and Economics},
volume={13},
number={2},
pages={80--87},
year={2025},
url={https://pubs.sciepub.com/jfe/13/2/3},
issn={2328-7276},
abstract={This study examined how changes in the Net Present Value (NPV) of a company's projects impact fluctuations in its fair stock value. An experiment utilized a simulated stock market with a virtual company (Ahoo Co.) and a group of 20 finance experts (Evaluators) who predicted Ahoo's stock prices to serve as a fair value benchmark. Robust regression analysis revealed a statistically significant positive relationship between changes in Ahoo's project NPVs and changes in the Evaluators' predicted stock values. The NPV coefficient was highly significant, and NPV explained 60% of the variance in predicted stock values. These findings support the hypothesis that a company's fair stock value fluctuations can be significantly explained by fluctuations in the expected NPV from its projects. The study concludes NPV is a crucial determinant of stock valuation, with implications for investment strategies, corporate decision-making, valuation modeling, and market efficiency. Key limitations include the small Evaluator sample size and generalizability issues. Further research with larger samples is recommended to strengthen reliability.},
doi={10.12691/jfe-13-2-3}
publisher={Science and Education Publishing}
}