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Multi-period Asset Lifetimes and Accounting-based Equity Valuation: Take Care with Constant-growth Terminal Value Models!

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  • Matthias Meitner

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  • Matthias Meitner, 2013. "Multi-period Asset Lifetimes and Accounting-based Equity Valuation: Take Care with Constant-growth Terminal Value Models!," Abacus, Accounting Foundation, University of Sydney, vol. 49(3), pages 340-366, September.
    • Handle: RePEc:bla:abacus:v:49:y:2013:i:3:p:340-366
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    References listed on IDEAS

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    2. John Lintner, 1964. "Optimal Dividends and Corporate Growth under Uncertainty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 78(1), pages 49-95.
    3. Myers, Stewart C & Turnbull, Stuart M, 1977. "Capital Budgeting and the Capital Asset Pricing Model: Good News and Bad News," Journal of Finance, American Finance Association, vol. 32(2), pages 321-333, May.
    4. Michael H. Bradley & Gregg A. Jarrell, 2011. "Comment on “Terminal Value, Accounting Numbers, and Inflation” by Gunther Friedl and Bernhard Schwetzler," Journal of Applied Corporate Finance, Morgan Stanley, vol. 23(2), pages 113-115, June.
    5. Gunther Friedl & Bernhard Schwetzler, 2011. "Terminal Value, Accounting Numbers, and Inflation," Journal of Applied Corporate Finance, Morgan Stanley, vol. 23(2), pages 104-112, June.
    6. Fama, Eugene F., 1977. "Risk-adjusted discount rates and capital budgeting under uncertainty," Journal of Financial Economics, Elsevier, vol. 5(1), pages 3-24, August.
    7. M. J. Gordon, 1963. "Optimal Investment And Financing Policy," Journal of Finance, American Finance Association, vol. 18(2), pages 264-272, May.
    8. Feltham, GA & Ohlson, JA, 1996. "Uncertainty resolution and the theory of depreciation measurement," Journal of Accounting Research, Wiley Blackwell, vol. 34(2), pages 209-234.
    9. Lee, Hsiu-Yun & Wu, Jyh-Lin, 2001. "Mean Reversion of Inflation Rates: Evidence from 13 OECD Countries," Journal of Macroeconomics, Elsevier, vol. 23(3), pages 477-487, July.
    10. Fisher, Franklin M & McGowan, John J, 1983. "On the Misuse of Accounting Rates of Return to Infer Monopoly Profits," American Economic Review, American Economic Association, vol. 73(1), pages 82-97, March.
    11. Ohlson, JA & Zhang, XJ, 1998. "Accrual accounting and equity valuation," Journal of Accounting Research, Wiley Blackwell, vol. 36, pages 85-111.
    12. Hirschey, Mark & Wichern, Dean W, 1984. "Accounting and Market-Value Measures of Profitability: Consistency, Determinants, and Uses," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 375-383, October.
    13. Ritter, Jay R. & Warr, Richard S., 2002. "The Decline of Inflation and the Bull Market of 1982–1999," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 37(1), pages 29-61, March.
    14. John Lintner, 1963. "The Cost Of Capital And Optimal Financing Of Corporate Growth," Journal of Finance, American Finance Association, vol. 18(2), pages 292-310, May.
    15. Gordon, Myron J & Gould, L I, 1978. "The Cost of Equity Capital with Personal Income Taxes and Flotation Costs," Journal of Finance, American Finance Association, vol. 33(4), pages 1201-1212, September.
    16. Myron J. Gordon & Eli Shapiro, 1956. "Capital Equipment Analysis: The Required Rate of Profit," Management Science, INFORMS, vol. 3(1), pages 102-110, October.
    17. John Hughes & Jing Liu & Mingshan Zhang, 2004. "Valuation and Accounting for Inflation and Foreign Exchange," Journal of Accounting Research, Wiley Blackwell, vol. 42(4), pages 731-754, September.
    18. Michael Bradley & Gregg A. Jarrell, 2008. "Expected Inflation and the Constant‐Growth Valuation Model," Journal of Applied Corporate Finance, Morgan Stanley, vol. 20(2), pages 66-78, March.
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    Cited by:

    1. Stefan Dierkes & Ulrich Schäfer, 2021. "Valuation of firms with multiple business units," Journal of Business Economics, Springer, vol. 91(4), pages 401-432, May.

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