Advanced Search
MyIDEAS: Login

Comparison Of The Residual Income Valuation, Abnormal Earnings Growth And Free Cash Flow Models: An Empirical Study Of The Brazilian Capital Market

Contents:

Author Info

  • Eric Serrano Ferreira

    (Espirito Santense Integrate College)

  • Valcemiro Nossa

    (FUCAPE Business School)

  • Bruno Cesar Aurichio Ledo

    (FUCAPE Business School)

  • Arilda Magna Campanharo Teixeira

    (FUCAPE Business School)

  • Alexsandro Broedel Lopes

    (USP – University of São Paulo)

Registered author(s):

    Abstract

    This study compares the explanatory power of the residual income valuation (RIV), abnormal earnings growth (AEG) and free cash flow (FCF) models in the Brazilian capital market, through an empirical test to compare the three models, using data on companies listed on the BOVESPA. Each model was analyzed annually over the period from 1995 to 2002 by multiple linear regression. The results show that from 1995 to 1999 the RIV model had better explanatory power than the other two models, and from 2000 to 2002 the AEG and RIV models were the same, an indicator of the Brazilian market’s development in the more recent years of the study period. The FCF model had the least explanatory power in all the years analyzed. The results were confirmed by panel data analysis.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.bbronline.com.br/public/edicoes/5_2/artigos/dpwjpedzii2122010102522.pdf
    File Function: Full text
    Download Restriction: no

    Bibliographic Info

    Article provided by Fucape Business School in its journal Brazilian Business Review.

    Volume (Year): 5 (2008)
    Issue (Month): 2 (May)
    Pages: 143-162

    as in new window
    Handle: RePEc:bbz:fcpbbr:v:5:y:2008:i:2:p:143-162

    Contact details of provider:
    Postal: Fucape Business School Brazilian Business Review Av. Fernando Ferrari, 1358, Boa Vista CEP 29075-505 Vitória-ES
    Phone: +55 27 4009-4423
    Fax: +55 27 4009-4422
    Web page: http://www.bbronline.com.br/
    More information through EDIRC

    Related research

    Keywords: residual income valuation; abnormal earnings growth; free cash flow; panel data.;

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:bbz:fcpbbr:v:5:y:2008:i:2:p:143-162. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sarah Lasso).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.