This paper tells the story of a student of economics and finance who meets a couple of alleged psychopaths, suffering from the ‘syndrome of Zelig’, so that they think of themselves to be experts of economic and financial issues. While speaking, they come across the concept of excess profit....

This work presents a notion of residual income called Systemic Value Added (SVA). It is antithetic to Stewart’s (1991) EVA, though it is consistent with it in overall terms: a project’s Net Final Value (NFV) can be computed as the sum of capitalized EVAs or as the sum of uncapitalized SVAs....

We implement a recursive out-of-sample method to examine anomalies-based ex-ante predictability in the cross-section of stock returns. We obtain a series of simulated out-of-sample returns, consistent with investors using only prior information when choosing predictor variables. We find that, by...

For the last two decades, authors (e.g. Ohlson, 1995; Lev, 2000, 2001) have regularly pointed out the enforcement of limitations by traditional accounting frameworks on financial reporting informativeness. Consistent with this claim, it has been then argued that accounting finds one of its major...

Le recours au coût historique et à des techniques d'allègement des bilans comme la titrisation permettent aux banques de disposer d'une marge de manoeuvre en matière comptable. Le développement des marchés financiers et l'orientation actuelle de l'IASC et du FASB en faveur de la juste...

This study investigates the extent to which three key summary accounting income figures, namely operating income, net income and comprehensive income, provide value-relevant information to investors in Germany, France, Italy, Spain and the UK. Using a large sample over the pre-IAS-compliance...

Neste artigo elabora-se uma abordagem empírica, com recurso a técnicas econométricas apropriadas para dados em painel, que visa contribuir para a redução (ou mesmo eliminação) do desvio entre os valores contabilístico e de mercado das empresas. Tendo por base 20 das empresas que mais...

The internal rate of return (IRR) is often used by managers and practitioners for investment decisions. Unfortunately, it has serious flaws: (i) multiple real-valued IRRs may arise, (ii) complex-valued IRRs may arise, (iii) the IRR is, in general, incompatible with the net present value (NPV) in...

Practitioners and most academics in valuation include changes in liquid assets (potential dividends) in the cash flows. This widespread and wrong practice is inconsistent with basic finance theory. We present economic, theoretical, and empirical arguments to support the thesis. Economic...

We examine the value market assigns to components of the cash flow to equity including potential dividends. We study non financial publicly traded firms from five Latin American countries. The model includes four variables: market value of equity, dividends paid, change in equity investment and...