In this dissertation, I examine the impact of earnings management and expectations management on the usefulness of earnings and analyst forecasts in firm valuation. Earnings and analyst forecasts are important inputs into accounting valuation models. Their ability to reflect current and predict...

Way back in 1934, Graham and Dodd observed the importance of earning power in investment theory. According to them, history of actual earning with a reasonable expectation should be approximated in future. The empirical study of Ball and Brown (1968) contends that of all the sources of...

The study reviews equity valuation, and proposes an alternative equity valuation model based on a random process modelling of earnings and equity growth. A Markov process is used to model earnings, standardized as earnings to book value, and book value based on rating category. This assumes a...