Ohlson is a big name in capital market research in Accounting. He has conducted various studies in this field and developed a capital market research model in 1995. His popular model has been tested, discussed and commented by many other researchers including Kothari [2001]. The model is as follows:
MVE = a + b1E + b2BVE
R = a + b1E
OCF = a + b1E
In this model, earnings [E] and book value of equity [BVE] are said to have significant relationship with market value of equity [MVE]. Earnings is also significantly related to stock return. Lastly, earnings can also significantly predicts operating cash flow.
Thursday, June 12, 2008
Sunday, June 1, 2008
Article Review
This blog is initiated for the purpose of reviewing articles related to my proposed area of study. InsyaAllah I will start my article review soon.
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