A practical comparison of firm valuation models: cash flow, dividend and income

Bailey, P; Brown, PJ; Potter, M; Wells, PA

A practical comparison of firm valuation models: cash flow, dividend and income

Bailey, P Brown, PJ

Potter, M Wells, PA

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Publisher:: Financial Services Institute of Australasia
Publication Type:: Journal Article
Citation:: Journal of the Securities Institute of Australia, 2008, Winter (2), pp. 22 - 28
Issue Date:: 2008-01

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Field	Value	Language
dc.contributor.author	Bailey, P	en_US
dc.contributor.author	Brown, PJ https://orcid.org/0000-0002-8603-0280	en_US
dc.contributor.author	Potter, M	en_US
dc.contributor.author	Wells, PA https://orcid.org/0000-0001-6822-4826	en_US
dc.date.issued	2008-01	en_US
dc.identifier.citation	Journal of the Securities Institute of Australia, 2008, Winter (2), pp. 22 - 28	en_US
dc.identifier.issn	0313-5934	en_US
dc.identifier.uri	http://hdl.handle.net/10453/10199
dc.description.abstract	Our research, based on a sample of listed Australian firms, indicates that the residual income model provides better estimates of firm value than two other commonly used models. It also provides advantages in that there is less need to forecast returns as far into the future and, with this model, a terminal value based upon a constant future return (or relatively low growth rates) can be used. This obviates the need to estimate an expected long-term growth rate, which is always problematic.	en_US
dc.publisher	Financial Services Institute of Australasia	en_US
dc.relation.ispartof	Journal of the Securities Institute of Australia	en_US
dc.title	A practical comparison of firm valuation models: cash flow, dividend and income	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	Winter	en_US
utslib.for	150103 Financial Accounting	en_US
utslib.for	1801 Law	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Accounting Discipline
pubs.organisational-group	/University of Technology Sydney/Faculty of Transdisciplinary Innovation
utslib.copyright.status	open_access
pubs.consider-herdc	true	en_US
pubs.issue	2	en_US
pubs.volume	Winter	en_US

Abstract:

Our research, based on a sample of listed Australian firms, indicates that the residual income model provides better estimates of firm value than two other commonly used models. It also provides advantages in that there is less need to forecast returns as far into the future and, with this model, a terminal value based upon a constant future return (or relatively low growth rates) can be used. This obviates the need to estimate an expected long-term growth rate, which is always problematic.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/10199