Classical single-factor comparable company valuation (CCV) like e.g. valuation using the price-earnings ratio is associated with several shortcomings. The two most important are the non-applicability of negative values in the basis of reference and the high requirements to the qualitative...

Residual income valuation is based on the assumption that the clean surplus relation holds. As pointed out by Ohlson (2000), among others, the standard clean surplus relation is frequently violated. Moreover, standard residual income valuation models rest on the implicit assumption that future...

Existing literature employs two approaches to assess the validity of alternative proxies for firm-specific cost of equity capital. One approach relies on the theoretical link between future realized returns and cost of equity capital, while the second approach relies on the theoretical link...

Properties of many important valuation rules can be quantified, examined and compared in a unified framework to assist policy decisions. Valuation rules can be viewed as econometric estimators of unobserved values of aggregates. Which valuation rule has minimum mean squared error (relative to...

The main objective of this study is to investigate the usefulness of accounting information in explaining the stock price performance in the Egyptian stock market. This objective centers on introducing an artificial intelligence technique, namely, Artificial Neural Networks (ANNs), instead of...

This study investigates the relative and incremental usefulness of operating cash flow and accounting earnings information in explaining the value of financially distressed firms. It extends our understanding of the price-earnings relationship in the context of financial distress. Unlike prior...

Finally, we show that, in a setting where the firm's initial owner sells his stake in the firm over the course of two periods, with disclosures of estimates of the firm's value occurring prior to each sale of shares, if the precisions of the estimates are public, the equilibrium precisions of...

This paper proposes a valuation method that addresses the impact of deferred tax balances on a firm's economic profitability and relies on readily-accessible and easily- understood current accounting data, rather than imperfect estimates of future cash flows. This method values a firm's future...

The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are currently working together towards a comprehensive standard of accounting for financial instruments with characteristics of equity, liability, or both. An important facet of this project...

This study explores insider trading as a function of differences between managers' and the market's assessment of company earning components - specifically operating cash flows and accruals. It extends prior research by more comprehensively studying earnings components. It also builds a...