A recent paper by Ohlson and Juettner-Nauroth (2005) develops a model in which a firm's expected earnings and their growth determine its value. At least on its surface, the model appeals because it embeds the core principle used in investment practice and, further, generalizes the Constant...

<italic>Estimating the Cost of Capital Implied by Market Prices and Accounting Data</italic> focuses on estimating the expected rate of return implied by market prices, summary accounting numbers, and forecasts of earnings and dividends. Estimates of the expected rate of return, often used as proxies for the...