This article provides an overview of the residual-income stock price valuation model and demonstrates its use in interpreting the DuPont return on equity (ROE) decomposition. The model provides theoretical support for the DuPont model's focus on ROE and aids in understanding the implications of...

I estimate a model for earnings containing a cyclical (stationary) component, in addition to a random walk trend modeled in extant studies, and investigate the extent to which the earnings cycle is capitalized in stock price. I estimate the cyclical component utilizing the Kalman filter. I find...

Prior research documents the reversion to a mean value over time of returns on assets and equity and increasing rates of reversion for firms that are farther from the mean and for poorly performing firms. Researchers have also begun to explore factors that may have predictive ability for...

This article provides an overview of the residual-income stock price valuation model and demonstrates its use in interpreting the DuPont return on equity (ROE) decomposition. The model provides theoretical support for the DuPont model's focus on ROE and aids in understanding the implications of...

This study utilizes a sample of Fortune 500 firms to examine earnings management via changes in the deferred tax asset valuation allowance. The study extends existing research in three ways. First, we document that the earnings effect of a valuation allowance change often cannot be determined...