Probabilistic business failure prediction models are commonly estimated from non-random samples of companies. The proportion of failure companies in such samples is often much larger than the proportion of failure companies in most real-world decision contexts. This so-called “choice-based...

We investigate a disaggregated version of the abnormal earnings growth (AEG) model of Ohlson and Juettner-Nauroth (2005). The value of the firm then becomes discounted free cash flows minus initial debt. Discounted free cash flows are equal to capitalized operating earnings from the initial...

In the abnormal earnings growth (AEG) model of Ohlson and Juettner-Nauroth (2005), there is one interest rate and no taxes. Their model focuses on bottom-line earnings and dividends and is hence viewed as an equity-level model. We first extend this model to a firm-level model based on operating...

Using Swedish data, the study investigates whether an investment strategy based on publicly available financial statement information can generate abnormal investment returns. The strategy involves two steps. First, a financial statement based prediction model of changes in the book return on...

Relative P/E-ratio valuation apparently still plays an important role among investment research analysts and advisors (cf. Goldman Sachs,1999). In a valuation model of this kind, the value of owners´equity is typically calculated as a function of an observed P/E-ratio for some peer company, or...

The impact of conservative accounting in residual income valuation (RIV) and abnormal earnings growth (AEG) valuation modeling is investigated in this paper. Unconstrained and two types of constrained model specifications are evaluated regarding their ability to withstand biases in book values...

The disclosure behaviour for a sample of quoted Swedish and UK pharmaceutical companies is investigated in the paper. The sample consists of three Swedish (Astra, Gambro and Pharmacia) and three UK (Glaxo, SmithKline Beecham and Wellcome) pharmaceutical companies, whose annual financial reports...

In order to enhance our understanding of the content and context of voluntary disclosures, the disclosure behaviour of a sample of Swedish and UK pharmaceutical companies is investigated in this paper. The investigation has been guided by a fundamental ("residual income") valuation model, based...