This paper compares the value relevance of book value and dividends versus book value and reported earnings. Our work is motivated by recent research including Ohlson (1995), Feltham and Ohlson (1995), Bernard (1995), Burgstahler and Dichev (1997), Collins, Maydew and Weiss (1997), Barth, Beaver...

Research on the accounting rate of return (ARR) began with Harcourt (1965), Solomon (1966) and Vatter (1966) and continued with Kay (1976, 1978), Peasnell (1982), Franks and Hodges (1984), Kay and Edwards (1986), Edwards, Kay and Mayer (1987), Brief and Lawson (1992), Brief (1996) and others....

This paper compares the value relevance of book value and dividends versus book value and reported earnings. Our work is motivated by recent research including Ohlson (1995), Feltham and Ohlson (1995), Bernard (1995), Burgstahler and Dichev (1997), Collins, Maydew and Weiss (1997), Barth, Beaver...