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Earnings, Book Values, and Dividends in Equity Valuation: An Empirical Perspective *
Author(s) -
OHLSON JAMES A.
Publication year - 2001
Publication title -
contemporary accounting research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.769
H-Index - 99
eISSN - 1911-3846
pISSN - 0823-9150
DOI - 10.1506/7tpj-rxqn-tqc7-ffae
Subject(s) - dividend , valuation (finance) , earnings , equity (law) , residual income valuation , economics , financial economics , econometrics , book value , earnings response coefficient , accounting , finance , equity risk , political science , law
This paper revisits Ohlson 1995 to make a number of points not generally appreciated in the literature. First, the residual income valuation (RIV) model does not serve as a crucial centerpiece in the analysis. Instead, RIV plays the role of condensing and streamlining the analysis, but without any effect on the substantive empirical conclusions. Second, the concept of “other information” in the model can be given concrete empirical content if one presumes that next‐period expected earnings are observable.