Purpose – This study aims to test empirically the validity of the accounting valuation model that is based on earnings and book values for loss-reporting firms under a conservative accounting regime. Design/methodology/approach – The empirical tests are performed by employing returns models...

Purpose – This study aims to test empirically the validity of the accounting valuation model that is based on earnings and book values for loss‐reporting firms under a conservative accounting regime. Design/methodology/approach – The empirical tests are performed by employing returns...

In this study we examine the validity of the earnings - book value capitalization (EBVC) model in the European banking sector. We perform cross section tests using a sample of credit institutions from 21 European Union countries. Moreover, we split our sample into code law and common law...