The valuation of equity is an active area of research. Though financial models for the valuation of equity exist, a pragmatic application of these financial theories necessitates the use of pro forma accounting. This suggests that perhaps financial models must incorporate a knowledge of accrual accounting practices. Accounting models of valuation incorporate accrual accounting. This paper, therefore, deals with important accounting-based valuation constructs and models.
Copyright American Society of Appraisers
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