An Empirical Investigation of the Traditional and the Clean Surplus Valuation Models

20 Pages Posted: 20 Jun 2002

See all articles by Stella N. Spilioti

Stella N. Spilioti

University of Piraeus - Department of Economics

George Karathanassis

Athens University of Economics and Business - Department of Business Administration

Abstract

Early theoretical work on equity valuation suggests that equity prices are determined by variables such as dividends and growth in dividends. However, these 'traditional' views have been challenged by recent studies that seem to indicate that equity prices are determined by book value and discounted future abnormal earnings. This paper employs panel data methodology and equity prices from Athens Stock Exchange empirically to compare the performance of the traditional and the more recent models of equity valuation. The results show that the performance of the Ohlosn (1995) model is quite similar to that of the traditional models even though in some cases Ohlson's model performance appears to be superior.

Suggested Citation

Spilioti, Stella N. and Karathanassis, George, An Empirical Investigation of the Traditional and the Clean Surplus Valuation Models. EFMA 2002 London Meetings. Available at SSRN: https://ssrn.com/abstract=314875 or http://dx.doi.org/10.2139/ssrn.314875

Stella N. Spilioti (Contact Author)

University of Piraeus - Department of Economics ( email )

Karaoli & Dimitriou 80
18534 Piraeus
Greece

George Karathanassis

Athens University of Economics and Business - Department of Business Administration ( email )

Athens
Greece

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