How Should the Value Relevance Research Employ Book Value of Equity?
How Should the Value Relevance Research Employ Book Value of Equity?
Author(s): Melik ERTUĞRULSubject(s): Business Economy / Management, Accounting - Business Administration
Published by: İşletme Araştırmaları Dergisi
Keywords: Mechanical interdependency; Ohlson; Value relevance; Valuation;
Summary/Abstract: Purpose – This study analyses how the mechanical interdependency affects the value relevance inferences by considering the Price Model. Design/methodology/approach – As the Price Model employs reported earnings together with book value of equity (BVE), it induces a mechanical interdependency since earnings are partially integrated to BVE via the net income available to owners of parent item. We suggest researchers subtract this item from BVE prior to analyses. We perform analyses by employing the Price Model with the unadjusted (or reported) version BVE and the Price Model with the adjusted version of BVE.
Journal: İşletme Araştırmaları Dergisi
- Issue Year: 12/2020
- Issue No: 2
- Page Range: 2031-2039
- Page Count: 9
- Language: English