Accounting-based valuation theory suggests that a firm's value (V) is a combination of its book value (B) and market expectations of future earnings. We empirically evaluate the ability of this model to explain the book-to-market (B/P) effect. We find that our empirical proxies of V dominate B...

Accounting-based valuation theory suggests that a firm's value (V) is a combination of its book value (B) and market expectations of future earnings. We empirically evaluate the ability of this model to explain the book-to-market (B/P) effect. We find that our empirical proxies of V dominate B...

We explore a new accounting-based valuation model in an international context. An appealing feature of the model is that it produces a measure of firms' fundamental value, quot;Vquot;, that is immune to accounting differences across countries. We explain why this model has the potential to...