This study addresses the problem of differences between firms and the impact on valuations based on multiples. We investigate the extent to which industry-based multiples ignore additional firm-specific information and develop measures for identifying peer groups that are not comparable with the...

Valuing equity -- The accuracy of equity valuation methods -- Multiples: Controlling for differences between firms -- Linear information models: The effects of conservative accounting -- Summary and conclusions.

Recent research concerned with enhancing conservatism corrections of linearinformation models (LIMs) reports a decrease in bias as compared to the Ohlson (1995)model. However, inaccuracy is not significantly reduced. These findings raise twoquestions: First, are LIMs able to capture...