The substitution of net value added for earnings in equity valuation
Abstract
Outlines the valuation models of Ohlson (1995) and Feltham and Ohlson (1995), which relate share prices to accounting data, and develops a version which substitutes net value added for earnings. Tests it on 1978‐1995 US data and shows that it is better than the conventional model at explaining price. Recommends that future capital market research should consider net value added as an alternative to earnings for wealth measurement.
Keywords
Citation
Riahi‐Belkaoui, A. and Picur, R.D. (1999), "The substitution of net value added for earnings in equity valuation", Managerial Finance, Vol. 25 No. 12, pp. 66-78. https://doi.org/10.1108/03074359910766352
Publisher
:MCB UP Ltd
Copyright © 1999, MCB UP Limited