Opportunities Knocking: Residual Income Valuation of an Adaptive Firm

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dc.creatorYee, Kenton K.
dc.date2000-09-06
dc.date.accessioned2026-07-07T05:33:00Z
dc.date.available2026-07-07T05:33:00Z
dc.descriptionMaintaining a competitive edge requires a firm to replace deteriorating business lines with new projects. Accordingly, part of a firm's value resides in its ability to exploit new opportunities. This article incorporates adaptation into Ohlson's residual income valuation framework and obtains a non-linear (convex) valuation formula. Although parsimoniously cast, the model makes two predictions which are consistent with phenomena reported in the empirical literature: earnings convexity and complementarity. Moreover, the Appendix introduces a new and powerful Equivalence Theorem. This Equivalence Theorem relates Modigliani-Miller dividend invariance to complementarity and earnings convexity in accounting-based valuation. For Web-based Abstract, see: http://papers.ssrn.com/paper.taf?abstract_id=239368
dc.descriptionAlternative download source is: http://papers.ssrn.com/paper.taf?abstract_id=239368
dc.identifierhttps://arxiv.org/abs/nlin/0009015
dc.identifierhttp://arxiv.org/abs/nlin/0009015
dc.identifierJournal of Accounting, Auditing, and Finance, v15.3, p. 225 (Summer 2000 issue) Journal of Accounting, Auditing and Finance, Vol 15, No 3, page 225 (summer 2000 issue)
dc.identifier.urihttp://salesiana.dossiersoluciones.com/handle/123456789/79857
dc.subjectAdaptation and Self-Organizing Systems
dc.subjectExactly Solvable and Integrable Systems
dc.subjectPopular Physics
dc.subjectPhysics and Society
dc.titleOpportunities Knocking: Residual Income Valuation of an Adaptive Firm
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