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The Accounting Variable And Stock Price Determination


  • stanley c. w. salvary

    (Canisius College)


Several tests have been conducted to determine which valuation model best fits stock price data. Given very little success, those studies suggest the need for a clear understanding of the market process of stock price determination. This paper advances the concepts of product costing and product pricing, which pertain to financial accounting valuation and the stock market price determination, respectively. This research effort presents a workable hypothesis of stock price determination.

Suggested Citation

  • stanley c. w. salvary, 2005. "The Accounting Variable And Stock Price Determination," Finance 0502011, EconWPA.
  • Handle: RePEc:wpa:wuwpfi:0502011
    Note: Type of Document - wps; pages: 29

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    References listed on IDEAS

    1. Campbell, John Y & Shiller, Robert J, 1988. " Stock Prices, Earnings, and Expected Dividends," Journal of Finance, American Finance Association, vol. 43(3), pages 661-676, July.
    2. repec:bla:joares:v:6:y:1968:i::p:67-92 is not listed on IDEAS
    3. Stavros B. Thomadakis, 1976. "A Model of Market Power, Valuation and the Firm's Returns," Bell Journal of Economics, The RAND Corporation, vol. 7(1), pages 150-162, Spring.
    4. James Tobin, 1977. "Monetary Policies and the Economy -- The Transmission Mechanism," Cowles Foundation Discussion Papers 456, Cowles Foundation for Research in Economics, Yale University.
    5. Lindenberg, Eric B & Ross, Stephen A, 1981. "Tobin's q Ratio and Industrial Organization," The Journal of Business, University of Chicago Press, vol. 54(1), pages 1-32, January.
    6. Arzac, Enrique R, 1975. "Structural Planning under Controllable Business Risk," Journal of Finance, American Finance Association, vol. 30(5), pages 1229-1237, December.
    7. Kormendi, Roger & Lipe, Robert, 1987. "Earnings Innovations, Earnings Persistence, and Stock Returns," The Journal of Business, University of Chicago Press, vol. 60(3), pages 323-345, July.
    8. Turnovsky, Stephen J, 1970. "Financial Structure and the Theory of Production," Journal of Finance, American Finance Association, vol. 25(5), pages 1061-1080, December.
    9. repec:bla:joares:v:17:y:1979:i:2:p:316-340 is not listed on IDEAS
    10. Vickers, Douglas, 1970. "The Cost of Capital and the Structure of the Firm," Journal of Finance, American Finance Association, vol. 25(1), pages 35-46, March.
    11. repec:bla:joares:v:6:y:1968:i:2:p:159-178 is not listed on IDEAS
    12. Stanley C. W. Salvary, 2005. "On Financial Accounting Measurement: A Reconsideration Of Sfac 5 By The Fasb Is Needed," Finance 0502015, EconWPA.
    13. Scott, Louis O, 1985. "The Present Value Model of Stock Prices: Regression Tests and Monte Carlo Results," The Review of Economics and Statistics, MIT Press, vol. 67(4), pages 599-605, November.
    14. Greenberg, Edward & Marshall, William J & Yawitz, Jess B, 1978. "The Technology of Risk and Return," American Economic Review, American Economic Association, vol. 68(3), pages 241-251, June.
    15. Kleidon, Allan W, 1986. "Variance Bounds Tests and Stock Price Valuation Models," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 953-1001, October.
    16. Shiller, Robert J, 1990. "A Scott-Type Regression Test of the Dividend Ratio Model," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 356-361, May.
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    Cited by:

    1. stanley c. w. salvary, 2005. "Financial Accounting Measurement: Instrumentation And Calibration," Finance 0502001, EconWPA.
    2. Tomáš Buus, 2009. "The Costing Formula Suitable for Pricing (Transfer Pricing) Decisions and Maximization of Business Value," Český finanční a účetní časopis, University of Economics, Prague, vol. 2009(2), pages 33-45.

    More about this item


    stock valuation models; fundamental value; committed finance; financial product costing; financial product pricing; 'investment base'; risk/return preferences; sequential expectations adjustment model; heterogeneous expectations; economic space.;

    JEL classification:

    • G - Financial Economics

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