Comparing the Accuracy and Explainability of Dividend, Free Cash Flow, and Abnormal Earnings Equity Value Estimates

By Jennifer Francis, Per Olsson, D. Oswald. 2000

460 citations recorded by the source corpus.

Subfields: Accounting, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/c871c67b5d4010d8c14cd779613de92ed8dd6848

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Martin Walker
2. Shahed Imam
3. C. Clubb
4. Richard William Barker
5. A. Damodaran
6. Efthimios Demirakos
7. T. O'Keefe
8. Russell J. Lundholm

In Finance

1. Martin Walker
2. Shahed Imam
3. C. Clubb
4. Richard William Barker
5. Efthimios Demirakos
6. T. O'Keefe
7. A. Damodaran
8. Russell J. Lundholm

In Strategy and Management

1. Martin Walker
2. Shahed Imam
3. C. Clubb
4. Richard William Barker
5. A. Damodaran
6. T. O'Keefe
7. Russell J. Lundholm
8. Norman Strong

Citations in the corpus

• Does Valuation Model Choice Affect Target Price Accuracy? (2010, background): “…prefer DCF to value IPOs and set their offer prices.5 Previous studies that explore the prediction errors of equity valuation models use either ex ante analyst earnings forecasts (Francis et al., 2000) or ex post 38 E. G. Demirakos et al. financial statement data (Penman and Sougiannis, 1998).”
• Reconciling Value Estimates from the Discounted Cash Flow Model and the Residual Income Model (2001, methodology): “CAR Vol. 18 No. 2 (Summer 2001) Francis et al. (2000) utilisent cinq années d’estimations Value Line pour la période prévisionnelle finie et supposent que le taux de croissance de la période restante est soit de 0, soit de 4 pour cent.”
• Residual Income Risk, Intrinsic Values, and Share Prices (2003, background): “…of residual income model value estimates have assumed cross-sectionally constant discount rates based on prevailing risk-free rates plus an ex post market risk premium estimate, usually on the order of 6 or 7 percent (e.g., Bernard 1994, 1995; Francis et al. 2000, 2001; Dechow et al. 1999).”
• The Use of Valuation Models by UK Investment Analysts (2008, background): “…developments in the accounting literature (Feltham and Ohlson, 1995; Ohlson, 1995; Penman, 1997), has focused on a comparison of residual income-based accounting valuation models and DCF models for equity valuation purposes (Penman and Sougiannis, 1998; Francis et al., 2000; Courteau et al., 2001).”
• Valuation Approaches and Metrics: A Survey of the Theory and Evidence (2007, background): “Francis et al. (2000), concurred with Penman and also found that excess return models outperform dividend discount models.”
• On Comparing Cash Flow and Accrual Accounting Models for Use in Equity Valuation: A Response to Lundholm and O'Keefe (CAR, Summer 2001) (2001, unknown): “Lundholm and O’Keefe emphasize this point, and it is acknowledged in the introduction to Francis et al. 2000 and Courteau et al. 2001.”
• The Implied Cost of Capital: A New Approach (2012, unknown): “3 Previous studies (e.g., Penman and Sougiannis, 1998; Francis, Olsson, and Oswald, 2000; Gebhardt, Lee, and Swaminathan, 2001) argue that the residual income model does a better job in capturing the effect of economic profits on firm value, and the resulting valuation is less sensitive to…”