search query: @author Collins, D. / total: 14
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| Author: | Collins, D. Pincus, M. Xie, H. |
| Title: | Equity valuation and negative earnings: the role of book value of equity |
| Journal: | Accounting Review
1999 : JAN, VOL. 74:1, p. 29-62 |
| Index terms: | ACCOUNTING STOCK MARKETS VALUATION |
| Language: | eng |
| Abstract: | This study provides an explanation for the anomalous significantly negative price-earnings relation using the simple earnings capitalization model for firms that report losses. The authors hypothesize and find that including book value of equity in the valuation specification eliminates the negative relation. This suggests that the simple earnings capitalization model is misspecified and the negative coefficient on earnings for loss firms is a manifestation of that misspecification. |
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