Open AccessA Conceptual Framework for A Corporate Finance Valuation Method
Author(s) -
Wai Leong Soon,
Rohaida Basiruddin
Publication year - 2018
Publication title -
business management and strategy
Language(s) - English
Resource type - Journals
ISSN - 2157-6068
DOI - 10.5296/bms.v9i2.13731
Subject(s) - valuation (finance) , market liquidity , econometrics , relevance (law) , economics , value (mathematics) , conceptual framework , accounting , accounting research , finance , computer science , philosophy , epistemology , machine learning , political science , law
The Ohlson Model and its variants have been widely studied by researchers for value relevance of accounting information. It has been used to predict share prices and to assess the fundamental value of a firm. The original Ohlson Model does not clearly define the non-accounting information variables as the linear information dynamics variables. In relation to that, we propose a conceptual framework that includes the Piotroski F-Score, trading liquidity and systematic risk as the linear information dynamics variables in the Ohlson Model to improve prediction of share prices and forecasting capacity of the Ohlson Model or to better evaluate the fundamental value of the firm. Literature pertaining to Ohlson Model, Piotroski F-Score, trading liquidity and systematic risk are analysed, compared and synthesized to fulfil the research objective. It is expected that this paper will motivate future researchers to conduct more research in this field.