To read this content please select one of the options below:

The substitution of net value added for earnings in equity valuation

Ahmed Riahi‐Belkaoui (College of Business Administration, University of Illinois at Chicago)
Ronald D. Picur (College of Business Administration, University of Illinois at Chicago)

Managerial Finance

ISSN: 0307-4358

Article publication date: 1 December 1999

521

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

Related articles