Reconciling Value Estimates from the Discounted Cash Flow Model and the Residual Income Model

Contemporary Accounting Research

Volumn 18, Issue 2, 2001, Pages 311-335

  Lundholm, Russell ^a   O'Keefe, Terry ^b  

^a UNIVERSITY OF MICHIGAN   (United States)

^b UNIVERSITY OF OREGON   (United States)

Author keywords

Discounted cash flow; Residual income; Valuation

Indexed keywords

EID: 0001905207     PISSN: 08239150     EISSN: None     Source Type: Journal    
DOI: 10.1506/W13B-K4BT-455N-TTR2     Document Type: Article

References (10)

1. Copeland, T., T. Koller, and J. Murrin. 1994. Valuation: Measuring and managing the value of companies, 2nd ed. New York: John Wiley & Sons.
2. Courteau, L., J. Kao, and G. Richardson. 2000. The equivalence of dividend, cash flows and residual earnings approaches to equity valuation employing ideal terminal value expression. Working paper, Université Laval.
3. Dechow, P. 1994. Accounting earnings and cash flows as measures of firm performance: The role of accounting accruals. Journal of Accounting and Economics 18 (July): 3-42.
4. Feltham, J., and J. Ohlson. 1999. Residual earnings valuation with risk and stochastic interest rates. Accounting Review 74 (April): 165-83.
5. Francis, J., P. Olsson, and D. Oswald. 2000. Comparing the accuracy and explainability of dividend, free cash flow and abnormal earnings equity value estimation. Journal of Accounting Research 38 (Spring): 45-70.
6. Miles, J., and J. Ezzell. 1980. The weighted average cost of capital, perfect capital markets, and project life: A clarification. Journal of Financial and Quantitative Analysis 15 (September): 719-30.
7. Ohlson, J. 1990. A synthesis of security valuation theory and the role of dividends, cash flows, and earnings. Contemporary Accounting Research 6 (Spring): 648-76.
8. _. 1995. Earnings, book values, and dividends in equity valuation. Contemporary Accounting Research 11 (Spring): 661-87.
9. Palepu, K., P. Healy, and V. Bernard. 2000. Business analysis and valuation: Using financial statements, 2nd ed. Cincinnati, OH: South-Western College.
10. Penman, S., and T. Sougiannis. 1998. A comparison of dividend, cash flow, and earnings approaches to equity valuation. Contemporary Accounting Research 15 (Fall): 343-83.